With anaemic growth in the US and continued debt problems on both sides of the Atlantic, Lowcock said his firm is currently moving many investors from equities into absolute returns.
He said that in times of uncertainty in the stock markets and when interest rates are so low, investors naturally look towards products offering more attractive returns. And the focus could shift to absolute returns.
“We could finally see absolute returns start to live up to their promises,” he said. “This is because in a flat and sideways moving markets, the strategies behind these funds can help investors deliver positive performance.”
Lowcock’s comments come after prolonged criticism of the funds not doing what they say on the tin – what it should say on the tin is also the subject of great debate. The stick with which they have been beaten up most recently is the one marked ‘inflation’ as more than half the funds in the IMA’s Absolute Return sector failed to beat inflation in the first half of this year.