Absolute return funds struggling

The environment of low interest rates and volatile share markets drives investors into absolute return funds. Those are supposed to generate positive returns in every market. An analysis of e-fundresearch.com based on Lipper for Investment Management fund data with 312 funds shows that the majority of absolute return funds were not able to deliver on this promise and has ended the year with a loss.

Only 48.72 percent or 152 absolute return funds have generated a positive return during the year 2015. In 2014, 69 percent were able to do so. In 2013 and 2012, 63 percent did so. On average, the funds generated a return of +0.45 percent in 2015 - with a bandwidth of -20.27 to +23.30 percent.

An analysis of 195 funds with a track record of five or more years shows that only twelve managers or six percent have achieved a positive return in every of the past five years. Those twelve managers have achieved +23.74 percent cumulative performance in the five years. Due to the usage of different strategies, the bandwidth goes from +6.20 to +63.69 percent.