The term ‘absolute return’ encompasses as the broad array of strategies with return profiles that can exhibit materially different outcomes based on the market environment. As investors review the previous 12 months what have been the underlying performance drivers, how should the dispersion in outcomes be interpreted and what the strategy forecasts suggest for 2021?
Lincoln Smith, senior portfolio analyst, Albourne Partners
- There has been a bifurcation in the performance of a range of strategies with equity long/short outperforming approaches such as global macro and relative value.
- Relative value holds the largest weighting with investors with event driven strategies being the least widely adopted.
- Unlike during the GFC hedge fund performance has been less problematic and whilst inflows are down redemptions remain relatively stable.