Pressure is mounting on absolute return managers to deliver what they promised investors - returns in all market conditions - as funds posted losses in the past year.
Poor performance has caused investors to question how long they will need to be patient in order to receive absolute returns. Despite touting returns of up to 10% per annum, or at least promising to beat cash over 12 months, Cazenove UK Absolute Target, Octopus Absolute UK Equity and SVM UK Absolute Alpha are all in negative territory, according to Morningstar’s one-year figures. Meanwhile, top performers in the sector have posted returns of up to 20%. Mark Dampier, the head of research at Hargreaves Lansdown, says target returns of 10% are “ludicrous”, and, while he understands why s...
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