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Growing interest in NewCITS

May 18, 2011

“Are you seeing convergence between regulated mutual funds and hedge funds?” was the question I posed to a panel of top fund industry executives from BNY Mellon, Brandes, Ernst & Young, John Hancock and Wells Fargo. The forum: a roundtable discussion kicking off the  International Bar Association’s 22nd Annual Conference on the Globalisation of Investment Funds, held in Boston this week.

“Yes,” was their response, “Mainly because mutual funds are increasingly incorporating alternative investments and hedge fund-style management techniques into their investment processes.”

The trend may be most pronounced in Europe, where a new term — “NewCITS” — has emerged to describe the regulated UCITS mutual funds that “aim to manage the risk/return trade‐off by the use of a wide range of strategies and instruments.” That’s how they’re described in a report just released by EFAMA, the European Fund and Asset Management Association. It’s an excellent introduction to the NewCITS phenomenon. Click here to download the full report, titled “The Evolving Investment Strategies of UCITS.”

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