Infovest21 Investor Sentiment Survey: Investors “neutral” to “negative” on UCITS funds

Investors “neutral” to “negative” on UCITS funds
In Infovest21's just-released quarterly sentiment survey of investors, 30% of the investors said they are “somewhat negative” or “very negative” on UCITS funds compared with 15% who view them as “somewhat positive” or “very positive.” One-half of the sample said they were neutral on UCITS funds.

Lois Peltz, president of Infovest21, observed, "Those taking a neutral stances said they were taking a wait-and- see approach to see if UCITS performed, what jurisdictions adopt it or what the tracking error looks like through a market cycle. Criticism included more assets leading to more hot money, not all strategies being compatible with liquidity structures, not a proxy for due diligence, and the regulatory wrapper gives a false sense of security."

Investors most positive about global macro over the next three months and 12 months

Of the 22 strategies asked about, the majority of investors felt "neutral" about 13 over the next three months, "somewhat positive" about eight, and "somewhat negative" about one. In the prior quarter, investors were "somewhat positive" about 12 strategies and “neutral" about 8.

In eight strategies, the majority of investors felt "somewhat positive." In rank order, these are: global macro (90)%, event driven/special situations (65%), distressed (55%), foreign exchange (50%), multi-strategy (50%), merger arbitrage (45%), mortgage backed (45%), and volatility arbitrage (40%).

In 13 strategies, the majority of investors felt "neutral." In order, these are: convertible arbitrage (60%), energy (60%), ETFs (60%), activists (55%), sector (55%), market neutral (50%), asset based lending (45%), emerging markets (45%), equity long/short (45%), managed futures (45%), short biased (40%), statistical arbitrage (35%), and fixed income arbitrage (35%).

In only one strategy, PIPES, did the majority of investors (55%) feel "somewhat negative."



Looking out over the next 12 months, investor sentiment becomes more positive. In no market did the majority of investors feel "very positive"
while in 11 markets, the majority of investors felt "somewhat positive" and in 10 markets, the majority of investors felt "neutral." In one market, the majority of investors were "somewhat negative." Last quarter, none of the investors felt “very positive” about any market over the next 12 months, the majority of investor felt “somewhat positive” in 13, “neutral” in 10 and “negative” about two.

The majority of investors were "somewhat positive" in global macro (88%), event driven/special situations (76%), distressed (59%),
multi-strategy (59%), energy (53%), emerging markets (47%), foreign exchange (47%), managed futures (47%), merger arbitrage (47%), equity long/short (41%) and volatility arbitrage (41%).

The majority of investors were “neutral” about market neutral (71%), convertible arbitrage (65%), activists (62%), ETFs (59%), mortgage backed (59%),
statistical arbitrage (53%), short biased (47%), and sector (47%).

In one market - PIPES - the majority of investors (59%) felt "somewhat negative."

Methodology: Infovest21 conducts this survey on a quarterly basis. This quarter, one-half of the investors responding were funds of funds while 25% were family offices and another 25% were consultants and pensions.