Janus Henderson's de Bunsen: Reputations in absolute return are generally made in bear markets

Choosing a blend of absolute return strategies

Last year proved to be a pretty good year for absolute return, with the average fund in the IA sector returning 2.7% in excess of cash (LIBOR), with volatility of 4.1%., writes James de Bunsen, portfolio manager on Janus Henderson Investors' UK-based multi-asset team.

If done consistently, that is exactly what these sorts of strategies should be setting out to achieve. Healthy positive returns in excess of cash with moderate to low volatility. Not trying to shoot the lights out. The difficult thing is how to access the average fund, let alone the consistently above-average fund. Even within the fairly small IA Targeted Absolute Return sector (111 funds), the dispersion of returns was pretty large in 2017. The best fund made a 17.4% return; the worst lost 12.8%. From top fund to bottom, that is a 30% return differential. Asset managers under fire...