Have Absolute Return Funds had their day?

Aged

I have one of these in my portfolio (Standard Life/ASI GARS) and it has failed to impress. I've been considering replacing it with a better one, but apparently the sector as a whole has been somewhat of a disappointment. I would appreciate hearing some of your opinions. 

tacpot12

I held one for a few years as part of a wider portfolio, but it underperformed every other fund for a few years, so I got rid of it. 

Albermarle

The SL one was one of the best known and I think had very large amounts invested in it , which have now reduced a lot .
One brighter spot is that it has gone up a few per cent this year, but during the last few years the performance has been abysmal.

tigerspill

I have had this fund for a number or years.  I must have invested at the wrong time, but it is now breaking even by a few pounds for the first time ever.  Thinking of getting rid.

Aged

Albermarle said:

One brighter spot is that it has gone up a few per cent this year, but during the last few years the performance has been abysmal.

Yes exactly, that makes me think it might be worth holding onto for a bit to see what happens.

Aged

tigerspill said:

I have had this fund for a number or years.  I must have invested at the wrong time, but it is now breaking even by a few pounds for the first time ever.  Thinking of getting rid.

Not surprising. Any ideas what you'd buy to take its place in your portfolio?

talexuser

I had it quite a few years ago now and got rid after a some years when it didn't do what it was supposed to do (same as tacpot above). I think the whole idea of absolute return has been pretty well discredited now since a history of non performance is available.

Aminatidi

I guess different people have different ideas of what absolute return means but if it means preserve and grow perhaps look at "wealth preservation" funds too.

Ruffer, Troy, and Capital Gearing leap to mind as some of the names you'd usually associate with this.

talexuser

and RIT and Personal Assets. I have all of these (dumped Ruffer) and have been putting a lot of my growth dividends into them, since they did well in the last downturn, and another can't be too far off.

BananaRepublic

I am gobsmacked that a fund can perform so poorly during five years of healthy stock market returns. I guess it generates good fees for the management, I like a happy ending.

I remember reading about these funds many years ago.  

Moe_The_Bartender

BananaRepublic said:

I am gobsmacked that a fund can perform so poorly during five years of healthy stock market returns. I guess it generates good fees for the management, I like a happy ending.

I remember reading about these funds many years ago.  

It depends what you are trying to achieve. If you have made your pile and are looking for wealth preservation, CGT/CG Absolute Return and PNL/Troy Trojan make perfect sense. Their long term track records are there to be seen.