Absolute Return

An investment objective that aims to generate positive returns, regardless of the overall direction of markets/asset classes etc. Absolute Return is distinct from traditional fund managers, who benchmark their returns to an Index/Sector or even a Factor.

The Best Brokers To Maximise Absolute Return

CFDs are not available to residents in the United States.

Absolute Return Use

Primarily the stated aim of Hedge Fund managers, a variety of strategies may be used, but all attempt to profit regardless of whether the prevailing trend is bullish or bearish. Benchmark targets, if they use them at all, tend to be cash or short dated bonds (3-month Gilts for example).

Absolute Return fund managers tend to be characterised by their use of short selling, leverage and high turnover in their portfolios.

All of these can increase gains relative to benchmark indices, but timing and investment errors mean that losses too are increased, leading to high volatility in overall performance.