Absolute return funds: Many have made significant losses, according to Morningstar figures
The IndependentSign up to our free money newsletter for investment analysis and expert advice to help you build wealth Sign up to our free money email for help building your wealth Sign up to our free money email for help building your wealth SIGN UP I would like to be emailed about offers, events and updates from The Independent. Fully 70 per cent of funds in the IA Targeted Absolute Returns sector are in negative territory over the past three months, according to Morningstar figures to 17 October. "Even when markets rise, many funds achieve little more than cash-like returns and they do it with much higher charges, sometimes including performance fees which are earned for beating a notional benchmark which could be less than 1 per cent per annum," he said. "We don't like relying too heavily on individual fund managers, and absolute-return funds are very biased towards their skill or luck," he said. "Absolute-return funds are a very good portfolio diversifier and an option for investors who may be worried about markets but are wary of fixed-income when interest rates could soon be rising," he said.
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