UK fund buyers have a greater appetite for active and alternative funds than their global counterparts as a means to manage increased volatility, according to research.
A survey conducted by Coredata Research found that 77% of those based in the UK are using alternatives for risk management, compared to the global average of 57%.
There is a similar disparity in the use of active funds to protect against volatility, a strategy adopted by 65% of UK respondents compared to 47% globally.
There was more alignment in the respective views of UK and global funds buyers when it came to predicting volatility for 2021.
Covid-19 was identified by 23% of respondents in the UK and globally as the top volatility concern. Similarly, 60% of global respondents expect market volatility to increase in 2021 compared to 54% of UK fund buyers.
Andrew Inwood, principal of CoreData, said that fund buyers will continue to favour active strategies and alternative assets in 2021 if, as expected, markets remain choppy.
“We will likely see a continued shift to private markets and alternatives as investors seek out uncorrelated sources of return to diversify portfolios and generate alpha,” he said.
The survey was conducted in November and December 2020 and canvassed 200 professional fund buyers globally.
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