Succeed with Absolute Return Mutual Funds

Physician's Money Digest, March 2006, Volume 13, Issue 3

BusinessWeek

BusinessWeek

Standard mutual funds can be a trickybusiness for physician-investors, sincereturns are measured by whether theybeat out other stock indexes or competitorfunds. But now a new kind of fund hascome on the scene and attempts to deliverwhat every physician-investor wants—apositive result regardless of how the stockmarket performs. points outthat although these "absolute return"funds seem ideal, not many of them havebeen around long enough to gauge theirsuccess. One such fund is Rydex AbsoluteReturn Strategies (www.rydexfunds.com).Although it just started in fall 2005, Rydexmanager Jeff Joseph states that the fundcan deliver absolute returns by using computermodels to design a portfolio that imitatesthe best-performing funds and rebalancingthe portfolio on a monthly basis.Other absolute-return funds, using varyingtechniques, include Alpha Hedged Strategies(www.aipfunds.com), Agile Multi-Strategy (www.agileinvesting.com), andUBS Dynamic Alpha A (www.ubs.com). Butcautions that because themajority of these funds are just startingout, you may want to take a wait-and-seeapproach to find out if they do indeed provideabsolute returns, or if they're anabsolute letdown.