Newton's Stewart on why AR funds are not just a fad

Iain Stewart, manager of the Newton Real Return fund, explains why targeting an absolute return is a reasonable response to a changed investment landscape.

Funds targeting an absolute return have become popular with investors on recent years and some commentators have dubbed this a new investment industry fad. We believe the trend is an entirely reasonable response to a changed investment landscape. To understand why, we need to look back. Many of us have either grown up or spent a significant part of our careers in an environment of supernormal returns for financial assets. The period in question was that between 1980 and the middle of the current decade and the key to why the period provided such strong investment return was the starti...