Absolute return funds should have been the key benefactor in a rising rate environment: theoretically, these funds are non-correlated with market beta and are free to deliver a positive absolute return whatever the macroeconomic conditions.
However, many investors found that this was not the case and a number of funds in this sector have experienced returns that echoed those of a bond fund. This is not the first time this has happened and over the years these outcomes have given the sector a bad name. However, is this the fault of the sector and the available products or perhaps the mindset of the managers who manage these strategies?
This is a financial promotion and is not investment advice. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.