Liquid alternatives limped out of 2015, their performance dragged down by losses in all the sub-strategies.
The Wilshire Liquid Alternatives Index recorded a 2% loss in December, and finished the year down 3.5%.
This was in line with the 3.6% negative performance of the HFRI Global Hedge Fund Index, but way off the 0.9% loss produced by HFRI’s fund-weighted index.
The S&P 500 Index ended the year up 1.4%, and the Barclays US Aggregate Bond Index up 0.6%.
All the liquid alternatives sub-strategies recorded losing performance in 2015: equity hedge, down 5.1%; event-driven, down 4.1%; global macro, down 3%; multi-strategy, down 3%; and relative value, down 2.9%.
Wilshire reported that the liquid alternatives universe comprises 565 funds, with total assets under management of $324 billion. Of these, 199 are equity strategy funds, 124 multi-strategy, 105 relative value, 97 global macro and 40 event-driven.
Eighty-four funds rolled out in 2015, while 43 funds were liquidated.
Investors favored global macro and multi-strategy funds last year, resulting in net inflows of $13.8 billion and $4.7 billion, respectively, for total inflows of $18.5 billion.
Other sub-strategies recorded net outflows: relative value $20 billion, equity hedge $11.9 billion and event-driven $6.1 billion, for total outflows of $38 billion.
Biggest Winners (net inflows) …
- BlackRock Strategic Income Opps $6.2 billion
- John Hancock Funds Global Absolute Return Strategy $3.4 billion
- Blackstone Alternative Multi-Strategy $3 billion
… and Lowers (net outflows)
- PIMCO All Asset All Authority Institutional $8.5 billion
- JPMorgan Strategic Income Opps $7.8 billion
- Goldman Sachs Strategic Income $7.7 billion
Wilshire predicted that markets in 2016 would be roiled by increased volatility. It said that as interest rates continued to ratchet up, liquid alternatives could help investors navigate changing markets.
— Check out Top 14 Fund Managers of 2015: Morningstar on ThinkAdvisor.