Even if they do defend capital over the longer term, not all absolute return funds have a good record of avoiding high drawdowns, warns Sam Liddle - something advisers should bear in mind when considering the sector
Until last month, drawdowns seemed almost to have become a thing of the past. Equity markets had risen, largely uninterrupted, since March 2009, while the UK gilt yield had dropped steadily over the same period - or even arguably since the early 1980s. Volatility had been hitting rock bottom. Apparently all people had to do to see their capital grow was be invested. Easy. Notwithstanding February's bout of market volatility, there is an argument this ‘easy life' could continue. The economic environment is benign. The IMF has recently upgraded global growth, with US tax cuts and Chinese ...
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