Absolute Return Funds

Absolute Return Funds are internationally known as hedge funds. Hedge funds are often considered high risk / high return investment products. This is because they have gained fame for making rich investors such as George Soros, John Henry and others, very rich. Hedge funds using different investment strategies, so it is usually considered out-of-reach to the average investor. In fact, hedge funds are considered to have the same volatility of the bond, but with a much higher rate of return.

In this article you will discover:

What is the Absolute Return Fund?
How Absolute Return Funds play a role in your portfolio
What is the Absolute Return Fund?

Absolute Return Funds are actively managed investments that aim to produce returns in and rising and falling markets through the use of a wide range of investment techniques. Traditional mutual funds tend to invest directly in equities, which may go either up or down. These funds have a greater range of derivatives, short positions and non-traditional securities in order to ensure their positions are protected in bearish markets.

The funds are massively different in size, scope and philosophy. Investment strategy employed by the fund manger will dictate whether investors receive returns in the form of income, capital appreciation, or both. The risk profile of absolute return funds can also be in the range from very conservative to very aggressive. The difference in the return and risk profile determines exactly which instruments are used by the fund manager. This methodology will be designated fund Product Disclosure and Prospectus.

The main features of hedge funds are:

Non-traditional investment techniques such as short selling, derivatives, guarantees
Performance incentive adjustment and director of investor interest
Using laptops to increase investment positions and potential yield
Accepting pf new investments in order to effectively implement its overall investment strategy
Minimal exposure to stock market
How Absolute Return Funds play a role in your portfolio

All fund managers are trying to achieve the best performance I can. Their whole reason for that increase your return on investment. Absolute Return Fund uses various investment instruments to make the most consistent performance for you.

The advantages of investing in Absolute Return Fund are:

Back to the rising and falling markets
Absolute Return Funds main advantage over the ordinary shares is that they aim to give you a return in both rising and falling markets. One of the keys to successful accumulation of wealth is to continually move forward. Absolute Return Funds ignore bearish and bullish trends to be consistent performers in its portfolio.
Diversification into non-traditional investment instruments

Diversification of the investment portfolio is key to success. Your portfolio should already contain stocks, bonds, property, cash, fixed interest investments. Absolute Return Funds offer another weapon in your arsenal of wealth accumulation. You are able to diversify your portfolio that gives you even greater security and, over time, a better return on investment.

Liquidity

Shares in these funds are often available directly from the fund manager, but it is easy to find, and traded on stock exchanges. This makes your investment is very liquid. You have the ability to increase or decrease the bet, in a fund at the click of a button.

Return from both income and capital

These funds can give you both returns in both income and capital. This expansion will help your tax position as it is not overly exposed to any kind of return.

Risk Management

These funds are also actively managed. Managers also tend to have large amounts of their own personal wealth invested to convince investors that managers are always trying to maximize return on investment.