During a decade of ultra-low interest rates, liquid alternative funds have become the fastest-growing asset class in Europe and the UK. But will the growth continue as rates begin to rise?
Liquid open-ended alternative funds, or liquid alts, have become the fastest-growing asset classes in the UK and European-domiciled cross-border fund market since the global financial crisis.
Morningstar’s Cross-Border Liquid Alternative Fund Landscape 2019 study, published last month, found that the number of funds has risen by 76% over the past ten years to 2,663 funds. Meanwhile, assets in such funds increased tenfold over the decade to €420 billion.