Absolute return strategies remain steady even when markets are shaken
by negative news
Each fund seeks to earn a positive total return that exceeds the rate of inflation by a targeted amount over a reasonable period of time regardless of market conditions. There can be no assurance that a fund will meet its objective. The funds are not intended to outperform stocks and bonds during strong market rallies.
Absolute return funds have fewer limitations on where they can invest as compared to traditional funds. They have the ability to move among security types (i.e., stocks, bonds, cash, and alternatives), capitalization ranges, styles, durations, credit qualities, and geographic regions. This flexibility in terms of asset allocation offers the advantage of improved portfolio diversification as compared to many traditional funds. Absolute return funds also may also have additional risks that traditional funds might not incur such as investing in derivatives, commodities and from the use of leverage.