Schroders head of UK retail Robin Stoakley says he would not rule out offering an absolute return fund but feels the sector still has questions to answer.
He says for a product to be deemed absolute return, it has to offer positive returns in all time periods, something that he feels can only be done with cash in the current environment.
He says: “If you look at the IMA absolute return sector in the past 12 months, the majority of funds with a track record are down in that period. The problem is that if you take out beta, much of it depends on fund managers making the right call on parts of the market. There are also questions on how these products react when the market turns.”
Skerritt Consultants head of investments Andrew Merricks says: “A number of these funds underperform over reasonable timeframes. The big call is definitely what the managers do when the market turns.”