McQuaker and Lyttleton debate absolute returns

Equity fund managers are divided on the ability of absolute return funds to deliver positive results in current market conditions.

Speaking at a FundsNetwork debate yesterday, managers including Henderson's Bill McQuaker and BlackRock's Mark Lyttleton discussed why there is such a difference between the best and worst performing funds. McQuaker has suggested the unusually high correlation within equity markets is the reason some absolute return funds are underperforming. The head of equities says the volatility in markets is making it difficult for long/short managers to generate returns "Everybody knows this has been a funny old world and the correlation between individual stocks is extremely high," he says. ...