The targeted absolute return sector mixes a number of different strategies with varied outcomes, but not all have delivered.
Fund sectors have traditionally been defined along asset class lines. As asset allocation has long been recognised as the key driver of investment returns; portfolio advisers typically start the portfolio construction process by selecting the asset class mix before populating this model with appropriate funds.
These single asset funds therefore represent ‘components’ of the portfolio. In contrast, those who do not wish to engage in individual asset selection and portfolio construction are able to choose ‘solution’ funds from the mixed asset sectors.