3 Absolute Return Funds that Deliver Absolute Returns

Absolute return funds came under scrutiny after many funds delivered materially negative returns during the financial crisis and again during the market turmoil in summer of 2011

Fatima Khizou 25 March, 2015 | 11:00AM

Absolute return investments have been one of the more controversial and challenged areas of the market. They came under scrutiny after many funds delivered materially negative returns during the financial crisis and again during the market turmoil in summer of 2011, therefore failing to deliver on their promise to generate steady and positive returns with lower volatility in all market conditions.

Many funds continue to struggle, but this does not mean it is an area bereft of opportunity

In addressing this, the Investment Association (IA) undertook a review of the sector in February 2013 and subsequently announced a change in the name of the sector to ‘Targeted Absolute Return’, in order to clarify that a positive return was a target rather than a guarantee. Despite these changes, expectations of how absolute return funds perform are often misunderstood by investors.  

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Absolute Insight Eq Mkt Netrl Ap GBP1.08 GBP0.56
BNY Mellon Real Return A GBP Inc109.05 GBP0.21
Janus Henderson UK Absolute Return A Acc157.10 GBP-0.38

About Author

Fatima Khizou  is an Investment Research Analyst for Morningstar

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