Last week's Investment Adviser carried
an article by our Head of UK Retail, Richard Pursglove, in which he
explains how to measure an absolute return fund's performance and
risk profile, and how these funds shouldn't be compared to
long-only relative return funds.
Key points:
• The lower an absolute return fund's correlation to equity markets
the better
• The Sharpe ratio shows a fund's volatility compared to the risk
free rate
• Gross exposure should indicate the level of risk the manager is
taking in the fund
• Net exposure illustrates the fund's exposure to the market
movements
Richard also explains that these funds should not be seen as a
substitute for other asset classes in portfolio construction.
Instead, they should be considered in their own right as an
effective diversifier for your clients portfolio, come rain or
shine.
 Click here to download the
article
If you require any further information, please do not hesitate to
contact your usual Gartmore representative, call the Gartmore
BrokerLine on 0800 212 433 or email
brokerline@gartmore.com
IMPORTANT INFORMATION
For professional investors only. Not to be circulated to retail
investors. The value of investments and the income from them may go
down as well as up and you may not get back your original
investment. Absolute return funds aim to achieve a positive return
in all market conditions, however, this is not guaranteed and it
may not always meet this objective. The views expressed are
Gartmore's views and must not be taken as an offer to buy or sell
units or shares in the markets mentioned. These views are provided
for information purposes only. The views expressed are as at 22
April 2010 and are subject to change. Please ensure investors read
the Simplified Prospectus before investing. Telephone calls may be
recorded for training and monitoring purposes. This document is
issued as at 22 April
2010. |