Get shorting

Absolute returns

A proper understanding of absolute return funds and their key ability to go short is crucial to obtaining value from them, as S&P explains. By Kate Hollis, director, Standard & Poor's Fund Services

Absolute return funds have become very popular in recent years, but there is much uncertainty in the marketplace about what constitutes absolute return funds, as they are often confused with funds labelled total return or target return. One problem is that there are no official definitions to date as yet, although reports suggest that an IMA sector definition is due in March. This lack of an official definition has led S&P Fund Services to create its own definition, under which one of the key characteristics of a fund in the Absolute Return sector, as set out by S&P Fund Services, is its ...