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While in some circles questions have been raised about the Absolute Return sector, it is clear that many Advisers still favour these funds but it is not a one-size-fits-all scenario.
Citywire Wealth Manager asked a group of advisers who their preferred managers were and why. On behalf of Gale and Phillipson, a large financial planning and investment management business based largely in the North, Peter Griffin said they were looking at these funds as alternatives to cash or gilts. They look for funds that deliver "slow and steady returns, no big drawdowns and relative protection from equity correlation" in 'normal' market conditions.
Church House and Tenax adopts a straightforward approach to the sector, with three simple principles:
1. Provide a clear and explicit performance objective
A return in excess of cash as measured by 3-month GBP LIBOR
2. Over a specified period of time
12-month rolling basis
3. Partnered with a policy to minimise volatility and risk of loss
Embrace diversification of assets, counterparties and corporate structures
Peter went on to explain that their strategy is to work with funds that are "truly trying to deliver a positive return in all market conditions, rather than targeting equity-like returns through complex and risky strategies".
Tenax has a strong reputation amongst independent fund research businesses, holding a 5-Crown Rating from Financial Express together with a Premium Rating from Dynamic Planner whilst also being in the rated funds list of Rayner Spencer Mills Research (RSMR) and holding Elite Fund status with Fund Calibre.
Full article is available here.