Cerulli Associates reported Monday that it was witnessing increased interest in long/short credit strategies within both the retail and institutional channels.
The firm noted that long/short credit strategies “are designed to provide return while also reducing volatility and adding diversification.”
Several managers interviewed by the Boston-based research firm said they have seen demand for alternative fixed-income products, in particular long/short credit, from financial advisors and institutions in search of yield and protection against interest rate risk.
Within Cerulli’s universe of 17 alternative mutual fund categories, long/short credit was the seventh top-selling category in 2012. The 13 funds that comprise this category brought in net flows of $1.1 billion in 2012 and $1.4 billion year-to-date through May 2013. Five new funds were introduced in 2012 from firms such as Compass EMP Funds and Highland Capital Management.