Absolute return funds must meet their targets

The concept of absolute returns is one of the simplest in investment and is actually the whole reaso...

The concept of absolute returns is one of the simplest in investment and is actually the whole reason behind it - ending up with more money than you start with. But the fact many so-called absolute return funds failed to meet cash-plus benchmarks last year shows there are some glaring flaws in the execution of this basic idea. These products have clearly suffered from market volatility, and many of the fixed-income instruments they hold have been damaged by the credit crunch. But many investors will have bought products advertising absolute returns precisely to counter market volatili...