Willcocks believes that only cash can offer a positive benchmark return in all market conditions and that while 2008 was supposed to be a good environment for absolute return products, a number of them failed to deliver.
He says: “These products should deliver over all timeframes and if they fail in a market like last year’s, which was ideal for them, then it is clear they still have plenty of questions to answer.”
Willcocks considers that investors should start looking at using cautious managed funds as the core component of their portfolio following the falls that were seen in UK equity income funds in 2008.
According to Investment Management Association figures, the average cautious managed fund fell by 15 per cent last year compared with a 24.5 per cent fall in the UK equity income sector.
Whitechurch Securities managing director Gavin Haynes says: “Each fund must be judged on its merits. The sectors are two very different animals.”