Extraordinary monetary policy since the financial crisis has skewed investment returns and tightened the relationships between equities, bonds and property. This makes effective diversification much harder to achieve than ever before. Including absolute return funds in portfolios has the potential to address this problem, aiming to deliver better risk-adjusted returns for your clients.
There are a wide variety of absolute return funds. However, they share some common characteristics. They are typically benchmark unconstrained and aim to generate a positive return over the medium to long term, no matter what the stockmarket is doing. They may also use sophisticated investment tools like derivatives and techniques such as short selling to achieve their objectives. It is important to note that absolute return funds are not providing a capital guarantee and may incur periods of loses for investors, in some cases the losses could be significant.
Schroders is a leader in absolute return. Over the past 20 years we have built one of the world’s largest absolute return fund ranges.
Our stable of internally-managed strategies is complemented by a handpicked selection of externally managed, normally hard-to-access, absolute return funds. These are offered in a liquid, transparent and regulated way through our investment platform called GAIA.
Our absolute return fund range is built for three key outcomes for investors. These include investment strategies seeking to deliver capital growth; investment strategies that exhibit low to no correlation with major risky asset classes such as equities, bonds, currencies and commodities; and also, investment strategies seeking to provide some level of protection against rising inflation. Whatever your clients’ needs, we have a broad range of solutions that can help.
Past performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.
Please note that there is no guarantee that an absolute return fund will achieve its objective.
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