Less than half of absolute returns funds beat inflation

Just 43% of funds in the IMA Absolute Return sector managed to beat inflation over past 12 months.


In looking at the returns generated in the sector, it points out that while some funds managed to generate positive returns, they failed to beat CPI so investors would have lost money in real terms. Over 40% of funds outperformed both RPI and CPI over the time frame. A further three beat CPI but couldn’t also surpass RPI, Michael Holland, managing director of FE, says.  

FE Analytics also point out that its performance figures do not take into account fees so in reality, a higher percentage of funds would have lost money in real terms once costs were subtracted from investor gains.

The data provider also notes that 11 funds ended the 12 months in negative territory while 13 funds do not qualify, as they do not have a sufficient track record to analyse, having been launched during the past year.

The best performing funds over the year were: the CF Odey UK Absolute Return Fund, up 38.72%; the GLG Emerging Markets Equity Ucits III fund, up 29.79%; and the Cazenove Absolute UK Dynamic, up 28.95%.  

Looking at groups, L&G Investment Management had the best track record with all three of its absolute return funds comfortably ahead of inflation, FE reports.  

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