Good UCITS – Bad UCITS: What works, what doesn’t, and the dangers of investor acquiescence

UCITS funds typically score well on risk management, leverage, compliance fronts, while they score poorly on documentation, reporting and transparency, notes SwissAnalytics.

After analyzing several dozen UCITS-compliant absolute-return funds, SwissAnalytics recently published a paper titled: “Good UCITS – Bad UCITS; What works, what doesn’t, and the dangers of investor acquiescence”.

UCITS vs non-UCITS

In its paper, SwissAnalytics compared results of UCITS-compliant absolute-return funds with more traditional hedge fund structures. The research firm’s exercise iidentifies similarities and differences between these two structures which alternative investment managers and investors are currently debating.

The research paper notes UCITS funds are often cited as being superior to non-UCITS for a variety of reasons including enhanced transparency, enhanced liquidity of instruments, better risk management, better fund...