Essentially you are relying on your fund manager to anticipate all of these factors to deliver a positive return every calendar year, when so much is changing so quickly.
Nonetheless, we believe that some funds within the absolute return universe offer significant opportunities.
BlackRock European Absolute Alpha and JPM Global Macro Opportunities have particularly caught the eye, especially when you consider their performance over a longer period.
Many investors will be asking themselves when the right time will be to start buying absolute return funds, given the difficulties they have faced and the present market conditions.
We would suggest that a better question would be not ‘when’, per se, but ‘how’. From such a broad group of funds there are a vast range of possible combinations to incorporate their strategies and diversification benefits into an effective portfolio.
Louis Tambe is a fund analyst at FE Investments
