Alternative Ucits funds saw assets under management hit 104.6 billion in the second quarter of 2013, according to figures published by Alceda Quarterly Ucits Review.
AuM grew by 8.3% from 96.6 billion in March 2013, to 104.6 billion at the end of Q2, breaking the 100 billion barrier for the first time, with investors focusing on larger blue chip funds.
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The report also revealed that daily dealing funds have proved most popular with investors, attracting 83% of assets.
Tracking the Absolute Hedge Global UCITS Index, the sector declined 0.53% in the second quarter, with losses concentrated in June, across a range of funds and strategies.
Regarding the performance of different sectors, the Market Neutral index gained 1.45% over the quarter.
The Credit Index with growth in assets of 3.4 billion to 26.6 billion at the end of Q2 returned 0.13% and Equity Long Short, growing AUM by 12% has returned 0.38%.
The managed futures index lost 3.79%, while AUM in the strategy was down 14.3%, including one fund closure following concerns over commodity exposure and use of index swaps in light of regulatory guidelines, Alceda reported.
Alceda said that 49% of funds by number charge a management fee of 0.5%-1% for institutional share classes. But, it said that these funds control some 74% of overall assets of alternative Ucits funds showing investors moving assets into low-fee products.
The report found that with investors showing more interest in funds without performance fees, 62% of alternative UCITS funds, which adopted the 20% performance fee model have only attracted 31% of overall assets.
Michael Sanders, chairman of the board, Alceda Fund Management SA, said: "With continued uncertainty in global markets, investors are looking to Alternative UCITS for diversifying strategies, increased transparency, less volatility in weak markets and improved liquidity.
As a result, we have seen the alternative UCITS sector demonstrating strong growth and investor interest, with total assets under management surpassing EUR100bn for the first time. As the sector continues to mature and funds continue to build on their track records, we believe that more investors will continue to enter this market," Sanders added.
