L&G Diversified Absolute Return fund loses over 8% in a day !

sabretoothtigger

I wanted an up date on this one

http://www.morningstar.co.uk/uk/snapshot/snapshot.aspx?tab=0&id=F0GBR04EPU&lang=en-GB


Unfortunately I got a bit confused with the timing for these funds, I should have got this so I owned it today and could get the gain about to appear I think

jamesd

wombat42 wrote: »

even more weird as it is supposed to be a low risk absolute return fund where market movements are supposed to be smoothed out

The IMA definition for the absolute return sector is:

"Funds managed with the aim of delivering absolute (i.e. more than zero) returns in any market conditions. Typically funds in this sector would normally expect to deliver absolute (more than zero) returns on a 12 months basis."

Daily smoothing is not a requirement and funds differ in their objectives, as specified in the IMA note:

"3. Performance comparisons are inappropriate due to the diverse nature of the objectives of the funds populating this sector, including differing benchmarks, risk characteristics and timeframes for delivering performance."

If you want an absolute return fund that does tend towards being market neutral you might try Blackrock's UK Absolute Alpha fund, though it does go net long or short as well, just less than with some others.

StevieJ

jamesd wrote: »

The IMA definition for the absolute return sector is:

"Funds managed with the aim of delivering absolute (i.e. more than zero) returns in any market conditions. Typically funds in this sector would normally expect to deliver absolute (more than zero) returns on a 12 months basis."

Daily smoothing is not a requirement and funds differ in their objectives, as specified in the IMA note:

"3. Performance comparisons are inappropriate due to the diverse nature of the objectives of the funds populating this sector, including differing benchmarks, risk characteristics and timeframes for delivering performance."

If you want an absolute return fund that does tend towards being market neutral you might try Blackrock's UK Absolute Alpha fund, though it does go net long or short as well, just less than with some others.

Based on that definition I ask again why is the Artemis Strategic Assets fund is not classed as Absolute return?

The Fund’s Aims
The objective of the fund is to achieve long–term
growth through investment in a portfolio of UK and
international assets. The fund will take a broadly
‘multi-asset’ approach with the intention to
perform well when markets are favourable, and
preserve capital when markets are poor. It
therefore aims to provide longer term positive
returns under most market conditions,
outperforming both cash and equities over rolling
three-year periods.

jamesd

"outperforming both cash and equities over rolling three-year period". Three years is much longer than twelve months.

While it's Active Managed sector definition includes things it does do: "investment in a range of assets" ... "up to 100% in equities" ... "may hold a high proportion of non-equity assets".

But you should really phone Artemis and ask. I haven't had trouble getting answers when I've phoned them with questions.

bendix

StevieJ wrote: »

Based on that definition I ask again why is the Artemis Strategic Assets fund is not classed as Absolute return?

.

Hargreaves Landsdown classifies it as an absolute return fund (if you do their x-ray analysis of your holding), but I don't think it is.

As Jamesd said, it has a longer investment time frame.

At the end of the day, does it really matter? It's a good fund which gives Littlewood a lot of freedom to do what he wants. I've been drip-feeding into it for a year and it's by the far steadiest and most consistent of around 18 funds I'm in.

I'm very happy with it and looking to increase my holding substantially soon.

StevieJ

bendix wrote: »

Hargreaves Landsdown classifies it as an absolute return fund (if you do their x-ray analysis of your holding), but I don't think it is.

As Jamesd said, it has a longer investment time frame.

At the end of the day, does it really matter? It's a good fund which gives Littlewood a lot of freedom to do what he wants. I've been drip-feeding into it for a year and it's by the far steadiest and most consistent of around 18 funds I'm in.

I'm very happy with it and looking to increase my holding substantially soon.

If you are looking for an absolute return fund to fit into your portfolio you are likely to miss the Artemis fund if it is not listed in that category. The only thing I can see that is different from the others is no performance fee.

Old_Slaphead

bendix wrote: »

Hargreaves Landsdown classifies it as an absolute return fund (if you do their x-ray analysis of your holding), but I don't think it is.

On the fund factsheet and their 150 list it's categorised as Active Managed - I certainly invested on that basis - not as an AR fund

StevieJ

Old_Slaphead wrote: »

On the fund factsheet and their 150 list it's categorised as Active Managed - I certainly invested on that basis - not as an AR fund

I have emailed them and asked what distinguishes it from AR, see if I receive an answer.

wombat42_2

only question mark on Artemis Strategic Assets is that it is a young fund. BlackRock UK Absolute Alpha fund was smooth as a baby's bottom for about a year then it uncharacteristically dipped.

StevieJ

jamesd wrote: »

But you should really phone Artemis and ask. I haven't had trouble getting answers when I've phoned them with questions.

I have done as you suggested and received the following prompt reply, I must say I quite like Artemis and their website is my favourite of the various funds.

Thank you for your email. The Strategic Assets Fund currently sits in
the IMA Actively Managed sector. The reason that it does not sit in the
Absolute Return sector is straight forward, it is not an Absolute Return
Fund. What I mean by this is, whilst it may currently look like an
absolute return fund, with various short positions, bond holdings etc,
there will certainly be a time, probably as inflation kicks in and the
manager becomes more bearish on equities, that the fund will be 100%
invested in bonds.
This is an aspect of the fund that we were keen to promote. The fund is
not constrained to be just an absolute return fund. Whilst there is a
time and place for absolute return funds, during periods of inflation
and sustained equity growth, we believe that such funds are rather
limited, and the freedom the Strat Assets fund manager has to invest in
long only etc, is a selling point of the fund, that we hope will produce
outperformance.
As the fund manager's presentation stated when we launched the fund, it
aims to offer "protection in falling markets and participation in rising
markets".

What is interesting they mention 100% bonds for safety (not short equities) this would not have been very
successful in the last crash as bonds tanked as well.