Capital Growth with downside protection

This is the complete list of funds that use derivatives to insulate your investment in the bad times, while not missing out on too much of the good.

Our unique quantitative methodology goes where no fund manager ratings have gone before See who performs the best in our comprehensive list of rated managers. Or look at the peer groups below to judge for yourself.

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Funds focused on convertible bonds that also adopt arbitrage strategies. This will involve the purchase of convertible bonds and short selling of the underlying stock. Short selling of an index, interest rate derivatives and currency hedging can also be used.

Credit Strategies

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -0.8
  • -4.3
  • 58
Funds investing predominantly in developed market equities that use long/short positions. The approach taken by funds can include strategies such as pair trades (buying a share and shorting another from the same region or sector), which is one of the most commonly used.

Long/Short Equity

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -3.7
  • -7.9
  • 102
Funds that are diversified across asset classes using derivatives to take long and short positions.

Multi Strategy

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -3.3
  • -7.9
  • 43
Funds that take both long and short positions in commodity-related equities and synthetic positions in commodities themselves.

Commodities

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -7.1
  • -15.4
  • 11
Funds that are exposed to global currencies and use derivative instruments to capture directional moves, both up and down.

Currency

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -1.8
  • -4.9
  • 23
Funds that invest predominantly in emerging market equities or Asia using long/short strategies.

Emerging Markets Equity

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -14.6
  • -19.2
  • 18
Funds that invest in a mix or one of the following types of vehicles: Newcits funds (hedge fund style strategies that use derivatives in a Ucits III structure), traditional, long only funds, or investment trusts.

Fund of Funds

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -4.9
  • -5.9
  • 44
Based on global and economic forecasts that will use derivatives for exposure to equities, fixed income, interest rate movements and/or currency.

Global Macro

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -5.7
  • -10.8
  • 32
Funds that hedge market risk and look to generate positive returns with a focus on equities. The most common trades are statistical arbitrage and relative value strategies.

Market Neutral

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -1.7
  • -5.5
  • 29
Funds based on trend following models that trade primarily in futures across asset classes. Discretionary trading can also be applied.

Managed Futures

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -4.5
  • -9.7
  • 22
Funds focused on convertible bonds that also adopt arbitrage strategies. This will involve the purchase of convertible bonds and short selling of the underlying stock. Short selling of an index, interest rate derivatives and currency hedging can also be used.

Convertibles

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -6.1
  • -8.9
  • 6
Funds that focus on special situations for example company merger and acquisitions, reorganisation, negative news that can affect stocks and other catalysts linked to change. Funds will mainly follow a long/short strategy.

Event Driven

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • -4.1
  • -8.5
  • 14
Funds that use derivatives to gain exposure to volatility. This can be linked to equity markets, stocks, convertible bonds and interest rates.

Volatility Trading

  • 1 year
    Return %
  • Maximum Loss %
  • Funds
  • 2.4
  • -4.4
  • 20

All figures are over a period of 1 year until 31st of December 2011

Volatility is based on average monthly performance and corresponds to the annualised standard deviation of a fund's return. Maximum Drawdown shows the largest decline in the net asset value (NAV) of a fund from peak to trough. NAV performance is captured on the last day of each month-some funds might be priced at different points in the month.

Alternative UCITS categories and analysis produced by Citywire. Underlying fund data sourced from Lipper.

How many rated fund managers?

  • 12 of 300
  • 5 of 300
  • 2 of 300

Alternative Ucits News

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Glossary

  • Maximum Loss

    The most you could have lost over a period by buying and selling a fund at the worst possible time. Also known as maximum drawdown.

  • Sharpe Ratio

    A measure of how much value a fund manager adds for investors in relation to the risk he or she takes above cash. A higher ratio is better for investors.

  • Short-selling

    Looking to profit from the fall in the value of an investment.

  • Total Return

    The profit (or loss) an investor would make on a fund or a sector over a given period. The data we use is net of fees and ignore initial charges.

  • Volatility

    A measure of how a fund's value fluctuates over time and is calculated on an annualised basis. Lower volatility means a smoother ride for investors or in laymen's terms: how choppy your returns are.

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