Alternative UCITS as bond surrogates or Alternative sources of return in portfolios

In this week’s Monday morning memo, Detlef Glow from Thomson Reuters Lipper states more and more investors are looking for investments in Alternatives UCITS funds┬áto protect their portfolios against rising interest rates. Previously investors sought out high-yield and longer duration bonds to generate higher returns, but with narrowing spreads this is currently resulting in an unfavourable risk-return trade-off. It is not surprising than that investors are attracted towards Alternative UCITS funds in the current market environment as they have the ability to generate returns in all market environments. However, investors should very carefully pick and select funds since the Alternative UCITS universe is very diverse.

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