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Newsletter September 2016: Absolute return strategies are not what they seem

By 15th September 2016Newsletters

Investment ReturnsThe promise of generating stable returns in both up and down markets feels like an attractive strategy for investors to adopt and ‘absolute return‘ funds have certainly attracted large sums of cash since the credit crisis. Yet the reality of being able to deliver on this promise is far from convincing: strategies are varied, complex and hard to compare; fees are high, relative to sensible alternatives; and correlations to underlying assets — such as equities and bonds — are higher than might be expected. A surprising proportion of funds have delivered absolute losses to investors over horizons of one year and even over three years. At the end of the day, there are no risk-free returns above cash returns.

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Tim Hale

About Tim Hale

Tim Hale is the CEO of Albion, a strategic consulting firm that works with many of the best wealth advisory firms across the UK. Tim’s book, Smarter Investing: Simpler Decisions for Better Results, has been described as a ‘must read’ by Mark R Richardson, former CEO of Chase Asset Management. Tim graduated from the University of Oxford and is a regular speaker at leading conferences across the UK.

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