Business Irish

Friday 23 February 2018

Savers get 8pc return in Standard Life fund

Charlie Weston Personal Finance Editor

INVESTORS can now make regular monthly payments into a fund that has been recording returns of 8pc a year since the global economic downturn in 2008.

The Standard Life absolute return fund invests in a variety of shares and derivatives to ensure the returns are positive even when markets are falling.

Standard Life's Global Absolute Returns Strategies (GARS) fund has returned 8pc annualised between September 8, 2008 and July 1, 2012, according to Sinead Cullen of the investment company.

Savers will be able to access the GARS fund, and 29 other funds in the Synergy portfolio, by investing from €175 a month.

GARS aims to give investors positive investment returns in all market conditions. It has a target return of cash plus 5pc per annum (gross of charges) over rolling three-year periods, Standard Life said.

Managers

Historically, absolute return funds have performed better in falling markets than rising ones as managers smooth stock market volatility by "shorting" either shares or currencies, finance experts said.

Absolute return funds consist of a "long" book, which are stocks held in the traditional way, and a "short" book. Shorting involves selling a stock that is thought to be about to fall in value, and repurchasing it when it is cheaper.

A finance fad over the past couple of years, not all absolute return funds actually beat inflation.

Irish Independent

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