Are absolute return funds a waste of money?

Ben Gutteridge, Head of fund research, Brewin Dolphin It was exactly a year ago we first highlighted our concerns that the ‘average' IMA targeted absolute return fund was of little benefit to the ‘average' equity biased portfolio. A year on, nothing has changed. Given the persistent and high levels of correlation with the FTSE All-Share, it appears the typical absolute return fund manager is merely assuming a modest amount of equity risk, while leaving the vast majority of assets in cash. The net result for the client is simply a lower risk - and lower return - iteration of equity m...