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Negative note on absolute return funds

Leading investment commentators have branded absolute return funds as a marketing tool and warned investors against putting their money in them.

Speaking at Money Marketing Live in Manchester last week, Thames River co-head of multi-manager Gary Potter said he is sceptical about absolute return funds.

Potter said: “I question what absolute return funds really mean. They are trying to make a positive return rather than a negative return which is surely what every fund is trying to do?

“It is a bit of a misnomer. There are very few people who have the skills to do it. I am rather sceptical about the terms multi-asset class investing and absolute return funds.”

Investment consultant Brian Tora says: “A lot of these absolute return funds have lost money. It is the same as a cautious managed fund. I am sceptical about the concept. You probably should not be investing in the equity market if you are concerned about downturns.”

Gartmore head of multi-manager Bambos Hambi said: “There are a lot of funds out there which have been named because that is what the marketing manager decided.”

Adam & Company Investment Management investment director Harry Morgan told delegates: “These funds might be attractive for those in a bearish mood but I would say, stay in other types of funds.”


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