Summary: Absolute return bond funds can help fill the need for income as cash and term deposit rates are low. These funds are benchmark unaware and can hold a wider range of fixed income assets than benchmark aware bond funds. Absolute return bond funds try to avoid the risk of capital loss through using a wide range of assets and strategies.
Key take-out: Returns have been relatively weak compared to traditional bond funds, but liquidity is higher than for term deposits.
Key beneficiaries: General investors. Category: Investment bonds.