A Case for Absolute Return
In an era where disruption is becoming the norm, absolute return strategies can play a crucial role in helping to navigate uncertainty. In this paper we introduce some of the factors supporting the case for absolute return in the current market environment.
14 minute read
Key takeaways:
- Absolute return strategies seek to generate positive returns regardless of market trends, utilising a diverse range of tools and sophisticated risk management techniques to help mitigate the impact of market volatility, potentially improving risk-adjusted returns.
- By being uncorrelated with traditional equities and bonds, absolute return strategies can help to enhance diversification, offering a smoother return path in balanced portfolios, especially when traditional asset correlations weaken.
- Absolute return strategies differ in objectives and management, with variations in asset class focus and geographical scope, providing diverse investment avenues tailored to different risk and return profiles.
Despite record stock market highs, heightened concerns about the risks of further market volatility have persisted, driving interest towards strategies capable of delivering performance regardless of the market backdrop.
In this environment, a well-managed absolute return strategy can give investors an additional tool to manage their exposure to risk, with the potential to generate a positive absolute return over time – participating in any equity market upside, while limiting the impact of any negative market periods.
In this paper, we look at some of the factors supporting the case for an allocation to an equities absolute return strategy.
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These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
There is no guarantee that past trends will continue, or forecasts will be realised.
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