SECTOR PROFILE
Performance of funds vs sector and index
Name |
1yr (%) |
3yr (%) |
5yr (%) |
10yr (%) |
VT Argonaut Absolute Return |
27.8 |
66.6 |
82.8 |
156.8 |
BlackRock European Absolute Alpha |
3.7 |
12.7 |
25.9 |
42.7 |
JPM Global Macro Opportunities |
-8.5 |
8.3 |
23.5 |
N / A |
IA Targeted Absolute Return |
1.2 |
8.9 |
9.0 |
30.0 |
FTSE All Share |
8.3 |
18.4 |
22.2 |
117.0 |
Source : FE Analytics
have their heads in the sand and are holding the same growth stocks that have done well over the last decade . “ This is the equivalent of driving a car while looking in the rear-view mirror with your fingers crossed ,” he says . “ Unfortunately , rear-view mirror investing is still how most people in the financial industry pick stocks and select funds .” Instead , Norris says investors should think about diversifying away from the overall direction , or beta , of the stock market . “ Funds that deploy hedging strategies but also bet against stocks they don ’ t like , because the business model is unsustainable or the valuation is too high , can offer a valuable non-correlated return profile that provides real diversification ,” he says . Real assets should also be uncorrelated with equities , and are regarded as a natural hedge against inflation . However , Hovenden is unconvinced by this argument , pointing out the reality doesn ’ t tend to match the theory , particularly if inflation leads to further volatility in stock markets . “ The problem I have is that most of the property and infrastructure vehicles have equity wrappers around them ,” he says . “ This means that if markets turn down , regardless of what the underlying assets are , their discounts to NAV will widen , meaning you get equity correlation .”
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