Like looking for a 'needle in a haystack': Why fund selection is key in the absolute return sector

Deep Dive into absolute return

clock • 3 min read
Charles Hovenden of Square Mile
Image:

Charles Hovenden of Square Mile

It is very simple. Targeted absolute return funds are meant to protect investors' capital and provide positive returns over reasonable time frames, irrespective of what is happening in stock or bond markets.

The investment objectives of many absolute return funds allow for extended rolling time frames of three or even five years, such that you would need to go back to the ‘proper' bear markets of 2000 to 2002 (the dotcom bust) or 2007 to 2009 (the Global Financial Crisis) for those generous time frames to prove really challenging.  In both those instances, global equity market indices suffered peak-to-trough declines of about 50% over two-and-a-half year periods and did not regain their peaks for more than five years. Since 2009, however, almost continuous support from central banks has m...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Investment

Recession will be the main focus in Q3

How to invest in a recession

Mild recession already priced in

clock 11 August 2022 • 4 min read
All the latest from the world of ESG investing

ESG Blog: UN secretary urged governments to impose windfall tax on 'immoral' energy companies

Round-up of ESG coverage

Investment Week
clock 04 August 2022 • 1 min read
The extraordinary general meeting (EGM) will take place on Friday 5 August.

Trian 1 story continues as shareholders call for support ahead of extraordinary general meeting

'Not fit for purpose'

clock 26 July 2022 • 4 min read
Trustpilot