Traditionally, investors have allocated to government bonds to provide portfolio insurance when stockmarkets have tumbled. This has been effective in the past, but with yields depressed to miniscule levels after more than a decade of quantitative easing, their efficacy to reprise this role is much diluted. Absolute return funds, in theory at least, therefore provide one of the few ways in which investors can now build protection into a portfolio.
Unfortunately, the performance of the absolute return fund sector as a whole in recent years does not corroborate the theory.
As can be seen in the chart above, the absolute return sector saw impressive growth in assets under management until 2018, peaking at £82bn.
Should investors stick with Woodford s forgotten Income Focus fund? thisismoney.co.uk - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from thisismoney.co.uk Daily Mail and Mail on Sunday newspapers.
Multiple issues for multi-asset investors
How should advisers navigate the sector when there are so many views on how to get it right?
By Cherry Reynard
Multi-asset investment has become a mainstay for many advisers, but separating the amateurs from the professionals isn’t always easy.
There is a proliferation of offerings, launched by fund groups, discretionary managers and even adviser firms themselves. Recent strong markets have flattered even the most inexperienced multi-asset manager. However, the future is likely to be more difficult, and advisers will need to seek out a true specialist to help see them through.
Identifying those specialists is not straightforward. While multi-asset managers are often keen to explain why their approach is best, whether a fund manager uses trackers, active funds, takes a multi-manager approach or invests directly appears to have little definitive bearing on the outcome.
UK Adviser | International Adviser international-adviser.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from international-adviser.com Daily Mail and Mail on Sunday newspapers.
Square Mile Research
SIGN IN PORTFOLIO ADVISER
Access full content on the Portfolio Adviser site, access your saved articles, control email preferences and amend your account details
Username
Baillie Gifford Japanese
Investing in Japanese companies with above average growth. Watch the Talking Factsheet for the Baillie Gifford Japanese fund with Amaya Assan, Research Manager.
The Talking Factsheets videos are an innovative way to bring the factsheets to life, combining Square Mile’s independent, qualitative fund research with accessible video content. The aim is to give advisers and financial institutions further depth to their research and help them make informed decisions.