Hambidge warns Absolute Return sector 'under threat'

Premier's multi-manager David Hambidge has warned absolute return funds are at risk of 'eating themselves' and may die out if they continue to underperform.

Hambidge, investment director, pooled funds, does not hold any absolute return vehicles in his £37m Premier Conservative Growth fund, believing they are under threat. "The existence of absolute return funds is under pressure as they did not take advantage of the bull market prior to the credit crunch," said Hambidge. "The problem with the sector is investors believe they are going to produce steady and guaranteed returns, with some funds looking to achieve 8%-10% returns, but this is not the case. "Fees are far too high, there are high levels of volatility and returns are low, and ...