Absolute Return Fund

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Absolute Return Fund

A mutual fund or other investment company that takes both long and short positions in order to produce a gain, or at least avoid a loss, regardless of overall market conditions. The idea behind an absolute return states that during a downturn, the gains on the short positions (which produce gains when security prices drop) offset the losses on the long positions. In other words, an absolute return fund seeks to combine the accessibility of a mutual fund with some of the strategies of a hedge fund. Critics contend that absolute return funds carry higher risks of loss than their proponents admit.
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Also, the funds invest in a combination of funds and securities, including absolute return funds that seek reduced volatility.
Absolute return funds aim to provide positive investment performance in all market conditions.
Absolute return funds are not designed to outperform stocks and bonds in strong markets.
This was especially true for the guys (and they are all guys) running absolute return funds.
BlueMountain manages USD20 billion of assets, with USD15 billion in absolute return funds and USD5 billion in collateralized loan obligations.
Risk-based approaches allow for the effective removal of historical constraints on the allocation to absolute return strategies, allowing equity long-short managers to compete with long-only and fixed income absolute return funds within the overall risk budget.
The risk-based approach effectively removes historical constraints on the percentage allocation to absolute return strategies, allowing equity long/short managers to compete with long only and fixed income absolute return funds within the overall fixed income risk budget.
APM is an asset manager that focuses on absolute return funds, microfinance- and commodity funds.
Owned by French investment bank Societe Generale, Lyxor is a specialist asset management firm that focuses on tracker funds, structured funds, alternative funds and absolute return funds.
Variable annuities were second in popularity, while target payout and absolute return funds earned very little interest, the data showed.
Meanwhile, fund companies are reworking their asset allocations, with changes ranging from cutting equity allocations in funds for workers nearing retirement to adding absolute return funds.