According to an Alternative Investment Survey from Morningstar and Barron's, the growth rates for alternative funds have slowed but still remain the highest compared to any other Morningstar category. Fund companies continued to launch funds at a record pace last year, many in the multi-alternative, long/short equity and non-traditional-bond categories. The report noted that "the contrast of increasing fund launches against softening flows suggests that currently supply may be outstripping demand." However, investors' enthusiasm for multi-strategy, long/short equity, long/short debt, and managed futures strategies, may mean a future pick-up in asset flows. The survey also found that while institutions expect to ease on their investments in alternatives in the next five years, advisors might step up theirs. Multi-strategy funds were listed as a top current allocation, as well as a top strategy for future allocations, by both advisors and institutions. The next most favored strategy was long/short equity.
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