Targeted AR funds haemorrhage assets despite solid returns

Nearly £15bn lost in AUM - and low investor confidence to blame

Funds in the UT Targeted Absolute Return sector have shed an eye-watering £14.7bn in assets under management (AUM) over the past 12 months to 28 January, data from FE fundinfo and research from Investment Week shows, but this is mostly due to bruised investor sentiment as opposed to poor performance.

While 35 absolute return funds increased their AUM over the past 12 months by a total of £2.8bn, 44 funds in the same UT sector have shrunk by more than £17.5bn.  Out of the 44 funds that shrank in size, however, lacklustre returns only played a part in seven of the vehicle's shrinking assets. Positive performance of the remaining 37 funds alone contributed a total of £3.7bn to their assets under management. Head-to-Head: Structured products vs absolute return funds However, this was dwarfed by investors pulling a grand sum of £16.5bn out of the investment vehicles. The f...