Alternatives’ Assets Fall in Q1

Of the 24 alternative fund categories that Strategic Insight tracks, only four had positive returns in the first quarter of this year. Not surprisingly, therefore, many individual alternative fund categories lost sizeable assets as investors headed for the doors.

The six international equity alternative fund categories taken as a whole, however, averaged negative returns of -3.8%, yet took in $6.1 billion in inflows in the first quarter, bringing total assets to $56.7 billion. The 12 U.S. equity alternative fund categories averaged negative returns of -6.7% in the first quarter; they had outflows of $2.8 billion, to end it with $103.5 billion in assets.

The three alternative bond fund categories saw their value decline 2.5% over the three-month period. Assets in these funds declined by $1.1 billion in the quarter to end with a value of $13.7 billion. The two alternative commodity fund categories lost 2.5% over that time frame, saw $52 million of inflows, and ended with $185 million.

In terms of the biggest outflows from individual alternative fund categories in the quarter, Global Unconstrained Funds, which lost 2.0% of their value, saw $5.8 billion walk out. This category now has $32.0 billion of assets under management (AUM). U.S. Equity – Long/Short Opportunistic Funds had the second-largest outflows—$1.5 billion—in the first three months of this year, ending them with $18.2 billion of assets; the category lost 1.2% of its value. The alternative fund category that endured the third largest outflows was Short Long Bonds; $1.2 billion drained away.

Of all the alternative categories, the best-performing for the quarter was  Long/Leveraged Bonds. These rose 10.1% in value, attracted $199 million in outflows, and ended with $431 million.

Alternative Funds—Flows and Performance