Geneva and Monaco-based structured product adviser Aurelys has selected Alix Capital, the provider of the Ucits Alternatives Index (UAI) family of indices, to create and manage a new index of Ucits absolute return fixed income funds.
Marc Diem, strategist at Aurelys, said that in the current environment characterised by historical low interest and inflation rates, investors are looking for solutions for their fixed income allocation. “A diversified portfolio of absolute return fixed income funds such as the Aurelys UAIX Fixed Income Index is, in our view, the best answer to them as it should produce positive performance even if interest rates and inflation increase,” he said.
The new index, Aurelys UAIX Fixed Income Index, will provide a diversified allocation to Ucits fixed income funds, which follow an absolute return investment approach. The Index is comprised of eight equally weighted funds offering daily liquidity. To be eligible funds must have at least $100mn in assets under management (AUM). Its construction is based on Alix Enhanced Index Optimizer, Alix Capital’s proprietary methodology.
Louis Zanoli, the chief executive at Alix Capital, said that fixed income funds are the largest by total assets, with close to 40% of all Ucits absolute return fund’s assets.
“It is also among the fastest growing as more and more investors are increasing their allocation to absolute return versus long-only funds,” he said.
Aurelys said it will use the new index to create investment products for its clients.