Church House: Not all absolute return funds are created equal

Church House Investment Management's sales director Sam Liddle discusses why it is wrong to tar all absolute return funds with the same brush.

Absolute return funds have attracted some criticism in recent weeks. The biggest gripe has been that they have not protected capital during the first quarter sell-off in markets. While we believe that a few months is too short a time to judge any investment, the controversy raises some important points about the nature of absolute return funds and how risk is managed. To our mind, an absolute return fund should have a number of key characteristics. First, it should start with cash: every investment beyond cash should offer a compelling reward potential, for an appropriate level of ris...