Comment by Joy Dunbar, Editor of Absolute UCITS
The UK’s Investment Management Association monthly fund statistics indicate that the absolute return and strategic bond sectors, many which are included in the Absolute UCITS database, have just had the highest net retail sales.
The absolute return UK sector was the best-selling sector in September 2012 with net retail sales of £193 million ($310 million), well above its monthly average of £58 million ($93 million) during the previous 12 months.
The last time absolute return was the top-selling sector was in September 2009 with net retail sales of £441 million ($709 million).
On the latest monthly figures absolute return is followed by the strategic bond sector, which was second best-selling sector in September 2012 with net retail sales of £144 million ($ 231 million).
This in my view highlights a paradigm shift in the industry. Investors have become accustomed to uncertainty in financial markets, which does not appear to be going away; classical equity and bond investments have their limitations; and the threat of inflation means that action is needed to retain the value of capital plus more.
As investors start to put their assets to work, the alternative UCITS sector, if they perform, should benefit as it appears to offer a lower risk and lower volatility way of investing. To ensure the long-term health of the sector, however, it must of course deliver on that.
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