Absolute Return Funds Fail to Deliver Despite £6bn Inflows

Investors continue to seek shelter in absolute return funds during market uncertainty, but some of those funds have lost investors money

Karen Kwok 18 August, 2016 | 11:01AM

Investors poured millions of pounds into targeted absolute return funds despite their negative returns in the first seven months of 2016, according to Morningstar data.

Absolute return funds failed to deliver on their promise to generate positive returns in all market conditions this year – challenged by the market turmoil.

This is not the first time these funds have not delivered on their moniker promise. In February 2013 the Investment Association undertook a review of the sector and subsequently changed the name of the sector to ‘Targeted Absolute Return’, in order to clarify that a positive return was a target rather than a guarantee. 

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Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk

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