Growing interest in absolute return funds

20 September 2013

In a volatile market filled with challenges for investors looking to achieve their objectives, hedge funds with absolute return capabilities have the potential to reduce investment risk, with some managers proving their worth by delivering consistently positive results.

According to Mark Burgess, Portfolio Manager of the Bennelong Kardinia Absolute Return Fund (the Fund), due to their strong performance absolute return capabilities are increasingly attracting attention in the Australian market.  Since inception in May 2006, the Fund has returned 14.11% per annum (as at 31 August 2013).

“Absolute return funds are really gaining traction in the market," said Mark. “The fact that so many advisers have shown increasing interest in the Fund demonstrates that more and more retail investors are looking at hedge funds to help them achieve their return objectives.

“Investors can achieve significant diversification and risk reduction benefits by combining hedge funds with traditional investment products. Hedge funds have a unique role to play in both generating and protecting the wealth of investors.”

Mark explained the Fund has evolved to meet increased demand and improve accessibility to retail investors, lowering its initial investment amount to $20,000 and providing daily liquidity.

“The Fund has achieved significant success at the end of its second year in the Bennelong Funds Management stable.  Since opening our offer to the retail investor market 17 months ago, Kardinia Capital’s funds under management have grown to over $140 million.  Figures like these really highlight investors’ appetite for an absolute return approach to investing,” he said.  

With strong ratings from a number of ratings agencies, the Fund has recently been added to several platform menus including Macquarie Super Wrap, BT Wrap, Asgard, Netwealth and Wealthtrac, as well as being added to the manager line-up of Colonial’s fund-of-fund offering, FirstChoice Lower Volatility Australian Share Fund.

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