/ FUND, PENSION, TRUST /
Pension
HENDERSON UK
ABSOLUTE RETURN
This fund’s focus on delivering positive returns each year
regardless of market conditions makes it suitable for the
consolidation stage of your pension
trustnetdirect.com
fund, bearing in mind its aim of
producing a positive return in each
calendar year while taking on as little
risk as possible – it has made 59.6
per cent since launch in 2009.
This is more than half the FTSE
All Share’s gains over the same
time and has been achieved with
less than a quarter of the maximum
drawdown – which measures the
most money an investor would
have lost if they bought and sold at
the worst possible moments – and
annualised volatility.
Another factor the managers take
into account when choosing stocks
FILE
MANAGERS: Ben Wallace & Luke
Newman
FUND SIZE: £1.36bn
LAUNCHED: 14/04/2009
OCF: 1.06%
PERFORMANCE OF FUND VS INDEX SINCE LAUNCH
120%
FTSE All Share (98.66%)
Henderson UK Absolute Return (59.42%)
100%
80%
60%
40%
20%
0%
Nov
May 15
Nov
May 14
Nov
May 13
Nov
May 12
Nov
May 11
Nov
May 10
Nov
-20%
May 09
W
hile many investors opt to
pile into higher risk funds
in the early stages of their
pension to maximise the amount
in their pot over the long term, it is
generally a good idea to move into
more balanced offerings in the years
leading up to retirement.
Henderson UK Absolute Return,
managed by FE Alpha Manager duo
Ben Wallace and Luke Newman,
could be an option either for
investors in this stage of saving for
their pension or for those who are
looking for a satellite holding in their
portfolio to balance risk.
As its name suggests, the £1.4bn
fund aims to provide a positive return
regardless of market conditions,
and as with many funds in the IA
Targeted Absolute Return sector, it
uses derivatives to achieve this.
The derivative the managers favour
is a contract for difference, which
involves making settlements through
cash rather than securities, to bet
whether companies’ shares will go
up or down.
While at least half of the portfolio is
held in “core” positions that Wallace
and Newman believe will fall or rise
by more than 20 per cent over the
course of the year, the remainder of
the fund is in shorter, tactical plays.
This technique appears to have
worked well for the five crown-rated
is the cost of a particular asset and
whether it is fairly valued.
The fund has made it on to the
FE Invest Approved list, with the FE
Research team saying: “This fund
could be a good option for an investor
who wants to invest in the stock
market while limiting risk.”
“The ability to short stocks has
allowed the managers to limit losses
in falling markets in the past and
sometimes to make a lot of money.”
However, the team pointed out it is
more correlated to the equity market
than many of its peers, suggesting
it may not be the best option as a
diversifier within an equity portfolio.
Source: FE Analytics
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