>Home>Strategies and capabilities>Absolute returns>Why absolute returns?  

Why absolute returns?

Absolute return funds aim to align the manager's objective with investors' needs, namely increased wealth with low risk. Combining this objective with the absence of a central asset allocation benchmark gives the manager freedom to exercise full discretion, selecting only those strategies they expect to be rewarding. Couple this broad remit with robust risk management to ensure diversification and prevent overexposure, and investors can expect a far superior reward/risk ratio than offered by conventional long-only investment in, say, equities.

But doesn't a traditional balanced multi-asset fund deliver the necessary return and diversification investors seek? No - many long-term static allocation investors felt financial pain and hardship when conventional diversification techniques failed to deliver stability when it was most needed in 2008 and early 2009. While public equities have since largely recovered, this experience demonstrated that many common diversifiers, like real estate and private equity, were actually fair-weather friends. They correlated significantly to public equities and additionally lacked liquidity and transparency.

Achieving more durable diversity carries the burden of continuous market analysis and dynamic asset allocation in order to respond to changing outlook and conditions. Few institutional investors today have the resources and the procedures to have their strategic asset allocation under continuous review. Those that do should have a comparative advantage.

Standard Life Investments' Global Absolute Return Strategies (GARS) offers a comprehensive approach to absolute return investing that is rarely matched across the investment industry.

The information contained on these pages is for investment professionals only and must not be relied upon by anyone else. This Fund is not guaranteed, a capital protected product or a substitute for cash. The value of your investments can go down as well as up. In order to achieve its investment objectives the Fund will make extensive use of derivatives.

Strategies and capabilities

 
 

Standard Life Investments Limited (ABN 36 142 665 227) is incorporated in Scotland (No. SC123321) and is exempt from the requirement to hold an Australian Financial Services Licence under paragraph 911A(2)(l) of the Corporations Act 2001 (Cth) (the 'Act') in respect of the provision of financial services as defined in Schedule A of the relief instrument no.10/0264 dated 9 April 2012 issued to Standard Life Investments Limited by the Australian Securities and Investments Commission. These financial services are provided only to wholesale clients as defined in subsection 761G(7) of the Act. Standard Life Investments Limited is regulated in the United Kingdom by the Financial Services Authority under the laws of the United Kingdom, which differ from Australian laws.