Navigating market volatility

Many absolute return funds are delivering on their promise to provide positive returns in all economic environments

Absolute return funds, by the very nature of their name, attempt to deliver a positive return on a portfolio regardless of market conditions. The principal concept is centred on capital preservation - or protecting principal in falling markets. Absolute return funds aim to maximise returns to investors based on active manager skill - or what is widely referred to as 'alpha'. Sources of alpha can range from tactical and strategic asset allocation, market timing, stock picking and superior research skills among others. In contrast, traditional mutual funds tend to look for relative returns ...