Investors Continue to Seek Shelter in Absolute Return Funds

Investors have bought more multistrategy fundsthan any other asset class this year, reflecting their concerns over volatility and asset prices

Karen Kwok 3 May, 2016 | 12:27PM

Multi-asset funds are the most popular sector of 2016; topping £1 billion inflows in the first three months of the year, reflecting investors’ anxiety over a low interest rate environment and a volatile stock market.

Multi-strategy funds posted inflows of £832 million in March alone, as investors face a continuing dilemma. Low yields on bonds mean that equities look like the only source of decent returns – but equities look risky thanks to a volatile stock market since the start of the year. Flows in March pushed inflows year to date to £1.3 billion, making it the most popular sector among investors in 2016 so far, according to Morningstar Direct.

Invesco Perpetual Global Targeted Returns gained the largest inflows in the sector of £614 million year to date. It has a balanced asset allocation in between equity and bonds, investing mainly in developed markets and is up 1.5% year to date.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Aviva Investors Mlt-Strat Trgt Ret 2£Acc108.28 GBP0.32
Fundsmith Equity R Acc4.10 GBP2.79
Invesco Global Tgtd Rets UK Acc56.85 GBP-0.28
Janus Henderson UK Absolute Return A Acc157.10 GBP-0.38
SLI Global Absolute Ret Strat Ret Acc74.72 GBP0.28

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk

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