Spouting Rock Monthly Commentary: Liquid Alternative Assets – July 2016

Nothing New, YTD Trends Continue with Regard to Strategy Flows

All asset figures stated and depicted are as of July 31, 2016

Jul1

For July, net asset flows for “Alternative” mutual funds (again, now including Long/Short Credit) were negative for the fourth month in a row, but YTD net flows remain positive (+$3.1B).   Managed Futures continued to see net inflows in July, along with Multialternative.  Managed Futures have now experienced 13 straight months of positive net flows.  The Liquid Alternatives space as a whole (including Nontraditional Bond Funds) experienced net outflows again in July (-$3.1B) as the Nontraditional Bond category experienced its now 20th consecutive month of net outflows (-$2.3B for July).  Most other strategies saw marginal net outflows.

Jul2

Monthly Focus: Category Market Share of Liquid Alternatives

In looking at Table 2, we can see that Managed Futures and Multialternative has increased their market share within Liquid Alternatives (as we at Spouting Rock define them) by 5% and 4% respectively over the last twelve months.  This increased market share has largely been at the expense of the Nontraditional Bond category which has lost 6% market share over this time, in addition to some smaller market share losses for Equity Long/Short (1%) and Long/Short Credit (1%).  A large piece of the net outflow story for Equity Long/Short has been the -$3B+ of net outflows experienced by the Marketfield Fund over the last 12 months, slashing their net assets from over $4B this time last year to now just over $1B. The Gotham Absolute Return Fund has also lost a great deal of net assets over the last year, adding to the net outflows for the Equity Long/Short category over this time period.  The Gotham Absolute Return Fund has seen its net assets fall from over $3B to now $1.2B (-$1.8B net outflows) over the last 12 months.

Jul3

As always, we continue to monitor the universe for new fund launches (and closures) as well as observe the flow of assets and any other quirks the Liquid Alternative OE mutual fund world might throw at us.  As the Liquid Alternatives universe continues to mature, it is likely that assets will continue to flow towards “Alternative” funds of the single manager variety.

Spouting Rock

Apr4

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