Mr Wallin agrees advisers are more willing to switch between absolute return funds when conditions warrant it. For example, equity long/short products were a key beneficiary of the increase in stock dispersion last year. Meanwhile, anecdotally, the popular Newton Real Return and Standard Life Gars funds tend to be used as core funds or natural drawdown products.
Mr Wallin says there have been other improvements in the sector. Funds are becoming more mature and accommodative in the way they treat their investors, offering lower fees, greater transparency and better regulatory structures.
The IMA Targeted Absolute Return sector has improved; now it needs the right markets in which to flourish.
Cherry Reynard is a freelance journalist
Expert view: Absolute return
Matthew Frost, associate director at Henderson, believes knowledge is improving: “Clients looking for absolute return investments understand the make up of the sector better than in its early days. I think this has helped reduce some of the earlier bad press that the sector received as people were confused with some of the funds.”
