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Total return strategies on the rise

Aberdeen head of multi-manager Graham Duce believes there will be a big increase in fund of fund managers using absolute/ total return products in their portfolios.

Duce says there has been a phenomenal rise in the number of absolute/total return strategies in the market. He says: “The number of Ucits III hedge funds has grown from 150 in 2008 to around 600 and these products are becoming available to retail investors under the absolute/ total return guise.”

Aberdeen launched a fund of Ucits fund under the diversified alpha banner in April this year. The multi-asset portfolio of Ucits III funds evolved out of the multi-asset growth fund and was designed to offer a spread of assets and a total return mandate.

Chelsea Financial Services managing director Darius McDermott says: “We will see these funds grow in popularity as they gain longer-term track records. My concern would be the fees that come in tandem with absolute return funds.”

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