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Digital Subscriptions > Portfolio Adviser > June 2017 > THE BIGGER THEY ARE, THE HARDER THEY FALL


Absolute return funds have been huge sellers for the past two years but as the funds get larger, performance is prone to suffer

Fund trends Absolute return

Just one fund from the IA Targeted Absolute Return sector has avoided losing money on a 12-month view over the past five years, while 13 members of the popular category have been in loss-making territory for more than two-fifths of the time.

During the past two years, the peer group has been one of the best-selling Investment Association sectors among both private and professional investors, as they sought the protection from market falls promised by its members.

Many absolute return funds have the objective of making a positive return over rolling three-year periods, but in this research a tougher hurdle was set in that we looked for those that have been hit by the fewest 12-month down periods of rolling returns.

To do this, we examined the performance of the sector over 60 rolling 12-month periods, calculated on a monthly basis. This means the first period covers 1 June 2011 to 31 May 2012, while the most recent spans 1 May 2016 to 30 April 2017.

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About Portfolio Adviser

Portfolio Adviser is the leading monthly publication for investment specialists, DFMs and wealth managers who represent high-net-worth clients based in the UK and the Channel Islands. It is the financial service industry’s guide to the latest trends in fund selection, portfolio construction and asset allocation.
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