Why absolute return funds must be handled with care

The IMA defines Absolute Return funds as those managed with the aim of delivering absolute (i.e. more than zero) returns in any market condition. There are however many ways of trying to achieve this, and while the funds may all sit in the same sector, there is great diversity in how they operate and the risks they take. Absolute Return funds, while having the objective of an overall positive return, can fall in value and are unlikely to deliver the level of growth many investors require to reach their investment objectives - it is generally a lower risk, lower return sector. There...