IA Targeted Absolute Return complementary characteristics , spanning a handful of strategies .” However , when it comes to using absolute return funds as a pure hedge against inflation , Hovenden warns this is more difficult . “ If inflation is my benchmark , as well as trying to preserve capital I also now need my absolute return fund to deliver a 9 % return ,” he says . “ I am not sure I have ever come across one that could do this .” Against an inflationary background ,
Hovenden says if his absolute return funds can deliver a steady return of 4 to 5 % then at least this will partially offset losses from equities .
Heads in the sand One fund that has beaten inflation – and then some – is VT Argonaut Absolute Return , which is up 22.7 % this year . Manager Barry Norris says that even though we have now entered official bear market territory , most investors seem to
Performance of sector vs indices over 10yrs
FTSE All Share ( 117.0 %)
IA Targeted Absolute Return ( 30.0 %)
UK Consumer Price Index ( 25.1 %)
120 % |
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100 % |
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80 % |
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60 % |
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40 % |
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20 % |
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0 % |
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-20 % |
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Jun12 |
Jun13 |
Jun14 |
Jun15 |
Jun16 |
Jun17 |
Jun18 |
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Jun19 |
Jun20 |
Jun21 |
Source : FE Analytics
Issue 85 - June 2022 / 51 /