What is an Absolute Return Fund?

The absolute return fund is a type of mutual fund that many investors choose to invest in at some point. Here are the basics of the absolute return fund and how it works.

Absolute Return Fund

This type of fund aims to provide a certain amount of return regardless of what happens in the stock market. Fund managers of this type of fund use a variety of different techniques in order to provide regular returns for investors.

Investment Methods

With this type of fund, they will typically invest in a number of different things besides stocks. They could invest in real estate, derivatives, commodities, foreign currencies, bonds and a number of other securities.


One of the major reasons that you might want to consider investing in this type of fund is for diversification. Many investors have most of their resources tied up in the stock market or securities that are influenced by the stock market. By utilizing an absolute return fund, you can diversify your part of your portfolio away from stock market correlation. This means that even if the stock market is going down, your portfolio might still be doing fine. This can be a great way to hedge your bets if the majority of your assets are tied up in stocks or equity funds.