Unlike “classic” mutual funds, which seek to surpass specific indexes, absolute return funds hunt for positive returns, regardless of general trends on the market..
Absolute return funds aim to deliver results in both falling and rising markets, and, compared to traditional funds, are more inclined to use exotic management techniques.
Their investment techniques may include – but are not limited to – futures, short selling, options, arbitrage, derivatives, unconventional assets and leverage.
The creation of the first such fund, in 1949 New York, is credited to Alfred Winslow Jones. Nowadays, the absolute return approach to investments is commonly referred to as a “hedge fund” and has become one of the most popular investment products..
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