The rise and rise of absolute returns

Cherry Reynard looks at what the future holds for absolute return funds.

The timing of absolute return funds has been serendipitous. They arrived just as investors were battered by years of volatile equity markets and overall returns had been weak. Many investors were prioritising capital protection over growth, having seen their portfolios slide. But good timing is not the only reason behind their popularity. Most attempts to offer investors a smooth, year in, year out return have seen limited success, including with-profits, fund of hedge funds and, most notoriously, split capital trusts. Absolute return funds, in contrast, have done what they said they would ...