Albemarle: The seven absolute return funds still worth backing

Albemarle Street Partners has highlighted seven funds in the IMA Targeted Absolute Return sector which could outperform, according to its recently launched screening tool ‘Alpha Quest'.

The tool aims to predict a manager’s ability to deliver alpha in the future by separating a fund’s performance into exposure to index beta, or the cost of capital, and returns above this – alpha. To make it onto the buy list, a fund must have at least a 60% probability of producing alpha over the next 12 months. The selection tool looks at the average annualised alpha and average annualised volatility of a fund manager, followed by an in-depth analysis of the strengths and weaknesses of their investment process. Sam Liddle, partner at the consultancy firm, said: “The Targeted Absol...