Appetite for absolute return funds falls to new low
Fund selectors are losing enthusiasm for absolute return funds. Appetite for long/short equity and bond funds as well as multi-strategy funds has fallen to its lowest point for at least two years.
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Fund selectors are losing enthusiasm for absolute return funds. Appetite for long/short equity and bond funds as well as multi-strategy funds has fallen to its lowest point for at least two years.
Multi-asset, or asset allocation funds, have been an investor favourite for years. But why would a professional investor invest in these one-stop shop funds?
While it’s no secret that passive, low-cost products are relentlessly increasing their market share, investors’ hunt for yield has also buoyed sentiment towards flexible and unconstrained mandates, according to Morningstar.
Performance fees are often seen as a necessary evil. But the unambitious hurdle rates most funds employ mean fund managers also get rewarded for underwhelming performance. Is that fair?
Most absolute return funds have failed to live up to expectations in recent years. As a consequence, their popularity with Italy’s fund selectors declined somewhat. But Italians’ love for absolute return has flared up once again, for obvious reasons.
Net flows into multi-asset funds have reached a two-year high, according to Morningstar fund flows data. Multi-asset is especially popular in two large European countries, known for their conservative investor base.
Marcus Bayer explains why investors should consider a multi-asset fund to navigate the low-yield environment.
Factors can be important guidelines for investors because they can act as a counterbalance for behavioural biases, explains BMO’s Christopher Childs.
Old Mutual Global Investors is to convert the Dublin-domiciled version of its Global Strategic Bond Fund into an absolute return vehicle, while planning to escape the risk of “crowding” associated with funds in the sector.
Willi Oberbeck, a fund selector at DZ PRIVATBANK, tells why he already started using alternative Ucits funds more than six years ago, long before demand for absolute returns started to really heat up.
Combining steady returns with low volatility is a key requirement for most investors. In this video, Unigestion’s head of macroeconomic research explains how investors can achieve that.
Investors keep going big in multi-asset funds. What’s exactly their appeal, which strategies offer most value and how can you identify them?