Deep Dive: Absolute return is not absolutely dead

Four years of consistent sector outflows

Pre-2008, absolute return portfolios were heralded as the all-weather investment option, striving to deliver positive returns – regardless of the market environment – by making use of the investment strategies and vehicles available to them.

In the golden years of AR, ASI Global Absolute Return Strategies (GARS), Invesco Global Total Return (GTR) and Aviva Investors Multi Strategy Targeted Return (AIMS) were some of the biggest funds in the industry, housing several billions between them. But since then, the asset class "has fallen a long way from grace", according to Ruli Viljoen, the head of manager selection at Morningstar. 2021 was the fourth consecutive year of outflows from absolute return funds, according to Morningstar, and in a study carried out by Investment Week, only 56 out of 108 AR funds have achieved their ...