Cf Octopus absolute fund.

FATHEROFTWO_2

I bought this fund about a month ago and im down 6.5 percent and is graded as medium risk but seems to be more volitile than many high risk funds.

I thought that this fund would have outperformed positively in volatile periods like this one .

It started out well and made 60 percent in a very short period of a few months.It seemed to benefit from March when the markey recovered .
I bought this fund believing that the fund manager could call the market short when he believed it was going down but it has disapointed so far.

Has anyone had dealing with this fund of late?

fg22

As the only constituent of a portfolio this fund is high risk. You can't expect a fund which made "60 percent in a very short period of a few months" to be anything else. Looking at its top 10 holdings it is shorting indexes which can result in unlimited losses and holding sub-ordinated bonds of a bank which are obviously high risk.

As a small component of a portfolio it's less risky due to low correlation with the market but still has the ability to lose you money.

You can't expect any equity funds to provide positive growth every month. You need to look at longer term performance (preferably longer than this funds been around) to have any chance of determining whether performance is due to skill (or lack of it).

Funds like this can outperform in periods like this but only if the manager makes the right moves of which there is of course no guarantees.

FATHEROFTWO_2

Yes it relies on the manager making the right calls and he hasnt done so this past month.

Ive also got cazenove UK absolute , blackrock uk absolute and gartmore european absolute and they havnt taken large losses like this one has.

When I bought the octopus fund I was hoping it would hedge against a fall but the manager has obviously called it the wrong way.

Ive got a few high risk funds in my portfolio and if wanted high risk I would have picked them.
I knew octopus was riskier than the other absolute funds and is stated as medium but I think it is a lot higher.

I think I will sell it on monday which means that it should be an excellent time to buy for everyone else:o

G_M

Either you should view funds like this as a long term investment, in which case selling on Monday is wrong - keep it for a year or two and then decide.

Or you should be prepared to buy/sell at short notice, taking account of the ups and downs to try to make a profit, in which case selling on Monday is wrong - keep it till it is at a high point.

FATHEROFTWO_2

I would normally agree with you but due to its rapid fall there is no guarantee it will rise again although it probably will.

This part of my folio I am ablle to admit that I an wrong in my judgement.
Im up 8.2 percent overall from aprill 2008 which isnt bad given the credit crunch.

Some individual funds I am up 20 percent

Many people put stop losses on shares and funds to protect there capital.
I am not going cash with the selling of the fund as I will be reinvesting in other funds that are more defined.

Last november I sold out of riskier funds and reinvested into safer funds and they recovered well hence my reasonable recovery.

I got burned years ago with marconi and other tech shares and soemtimes its time to bail out and accept the loss

turbobob

You've probably seen it already but here is the managers monthly update which explains some of the reasons for the losses over the last month or so - http://www.octopusinvestments.com/!documents/other/0007_Fact_Sheets/02_ABSOLUTE_RETURNS/081_%5BOctober_2009%5D.pdf

I invested in this recently (it makes up under 5% of my long term portfolio). It was always going to have more volatility than a lot of the absolute return funds. For the moment I'm happy to hold and see how it goes.

Jonbvn

As per the PDF posted by turbobob, they state:

"our biggest concentration of long exposure is in the financial sectors"

Given how jumpy the market is ATM, particularly financials the volatility is inevitable.

FATHEROFTWO_2

Ive sold half my holding in cf octopus which means the fund will have to rise by 13 percent to break even.

Ive reinvested the cash into firsts state asia pacific leaders as I was needing to rebalance it in the favour of the Asian sector anyway.