| “True faith,” said William Ralph Inge, the one-time dean of London’s St. Paul’s Cathedral, “is belief in the reality of absolute values.” Apparently, American exchange-traded fund (ETF) investors can be counted among the faithful. Why? Because they’ve committed nearly $1.7 billion into so-called “absolute return” products.
These funds aim to consistently produce positive returns, regardless of market conditions, through non-traditional management, i.e. by employing short sales, derivatives, leverage and/or investing in unconventional assets. Rather than being benchmarked against the more common metrics such as the S&P 500 or the Barclays Capital Aggregate Bond Index, the hurdles for absolute return ETFs are typically the Consumer Price Index (CPI), the London Interbank Offered Rate (Libor) or Treasury Bills...............................................Full Article: Source
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