Investors dump absolute return funds despite market turmoil

Retail investors moved back into equities but exited absolute return funds in August as markets endured their worst month since 2009.

According to the latest IMA statistics, absolute return funds - designed as all weather funds which should decline less sharply than long-only portfolios when markets fall - saw a net retail outflow of £122m last month. Outflows were the worst on record since the formation of the IMA Absolute Return sector in April 2008, raising questions about their role in portfolios given the current turmoil in markets which should play into their hands. Elsewhere, the IMA - headed by chief executive Richard Saunders (pictured) - said investors moved back into equity income funds, with the sector s...