Absolute Return

This product was added on the quality assurance side of the portal business arising from the substantive and / or formal defects. You can help by you are removing the deficiencies mentioned there or you engaged with any of the discussion.

Absolute Return is the measure of the absolute increase in value of an investment in a given period. It is compared with the relative return, which relates to the measure of the improved cutting relative to a comparison benchmark (see alpha factor).

Absolute Return is found mainly as a promotional promise in some alternative investments, which, unlike traditional investments ( mutual funds, stocks, bonds), the manager tried in every market phase steady capital growth ( Absolute Return ) as possible without fluctuations (volatility) to achieve. Specifically, this example be done by the manager always selects those assets in the capital market, where he expected an absolute return in the next investment period. Typically, however, that the investment guidelines allow the use of short sales. The manager then performs a speculative assessment of the future market development and if this indicates a bear market, it tries through short sales still bring about an increase in value. However, the risk of miscalculation remains with the investor because the products do not guarantee success speculation.

Absolute Return should not be confused with total return, which refers to the total return on an investment, including interest paid and taxes paid.

Criticism

The U.S. financial author Larry Swedroe points out that the HFRX Absolute Return Index, which measures the average performance of hedge funds pursuing an absolute return strategy, in 2008 a loss of 13.1% in 2009 to a loss of 3.6% and 2010 reported a loss of 0.1 %. Absolute Return products were to be another financial product that can only handle it, sold and not bought. No one should invest money in it; the only serious product with an absolute return are ( in the U.S.) treasury bills ( Treasury financing of up to one year).