Growing Investor Appetite for Alternative UCITS Funds
Temps de lecture : min
The year 2025 marks the return of alternative UCITS() funds to the forefront. These liquid strategies, deployed across multiple asset classes, rely primarily on global macro, arbitrage, and trend‑following approaches.
By using leverage to optimise market opportunities, these funds aim to deliver low correlation to traditional indices, thereby offering protection against volatility in mainstream markets. Between 2022 and 2024, their assets under management declined as investors shifted toward fixed‑income products that had regained appeal in a rising‑rate environment. In 2025, however, assets under management surged by USD 51.7 billion, reaching USD 287 billion(*).
Investor interest has been fuelled by strong performance. For example, the “AH Global” alternative UCITS index(**) gained 6.9% in 2025, marking its second‑best annual performance since 2010. The index has now posted 13 consecutive quarters of growth. Current market conditions provide a rich opportunity set for managers who benefit from elevated volatility and persistent dispersion—both across asset classes and within individual equities. These managers actively exploit uncertainty, whether stemming from geopolitical tensions or developments in artificial intelligence, taking short positions in struggling companies while backing the winners of this new era, and capitalising on divergences in global fiscal and monetary policies.
In an environment where the traditional negative correlation between equities and bonds has faded, where equity and credit valuations remain demanding, and where concerns over sovereign debt burdens weigh on fixed‑income markets, investors are seeking to diversify their allocations. Alternative UCITS funds offer the advantage of more stable returns and lower downside potential than equities, although they are not fully insulated from major market shocks, as seen during the COVID period. The UCITS regulatory framework provides daily or weekly liquidity, along with stronger diversification and risk‑control requirements than traditional alternative funds. These features have attracted both wealth‑management and institutional investors—particularly at a time when private debt is raising concerns in the United States and private‑equity funds are facing longer exit cycles.
This renewed momentum aligns with the themes highlighted in our Economic and Financial Outlook. In a world where visibility on inflation and fiscal trajectories remains limited, maintaining robust risk management and sufficient liquidity is essential to navigate uncertainty and market shocks. The conflict in the Middle East illustrates this imperative. Its prolonged impact on energy and commodity prices could weigh on all asset classes, including those typically considered less correlated.
(*) UCITS funds composed of liquid assets and eligible for public distribution to retail investors within the EU
(**) Source: Tycho Capital
Written by
Gwenvaël LEMAO
Multi‑Management Portfolio Manager
