Absolute return
One measure of the return of an investment portfolio / From Wikipedia, the free encyclopedia
Dear Wikiwand AI, let's keep it short by simply answering these key questions:
Can you list the top facts and stats about Absolute return?
Summarize this article for a 10 year old
The absolute return or simply return is a measure of the gain or loss on an investment portfolio expressed as a percentage of invested capital. The adjective "absolute" is used to stress the distinction with the relative return measures (often used by long-only stock funds) that are based on comparison to a benchmark.[1]
The hedge fund business is defined by absolute returns. Unlike traditional asset managers, who try to track and outperform a benchmark (a reference index such as the Dow Jones and S&P 500), hedge fund managers employ different strategies in order to produce a positive return regardless of the direction and the fluctuations of capital markets.[2] This is one reason why hedge funds are referred to as alternative investment vehicles (see hedge funds for more details).
Absolute return managers tend to be characterised by their use of short selling, leverage and high turnover in their portfolios.[3][4]