Targeted absolute return

Targeted absolute return

Absolute return, or just return, is the percentage gain (appreciation) or loss (depreciation) that an asset has achieved over a particular period of time.

And a targeted absolute return fund is one that aims to make a positive return, a fund that aims to make money come what may.

Why would you want a fund that doesn’t aim to make a profit, you might wonder?

Well, in a bear market a small return is better than a loss, and a small loss is better than a big loss.

Rather than just looking at absolute return you could look at relative return – which is where you compare the absolute return with the performance of the market (using a benchmark) or similar investments.

A targeted absolute return fund, however, uses different methods to traditional mutual funds to try to deliver positive returns regardless of the market conditions. They tend to be more popular in uncertain times as people want to limit potential losses, but the positive returns are not guaranteed.

 
 
Alternative investment market (AIM)

Alternative investment market (AIM)

Auto-enrolment

Auto-enrolment

logo_footer.png