Neil Shillito, director of SG Wealth Management
"In October of last year we voiced concerns over the state of the world economy and took action by investing part of our clients’ portfolios in two funds – Standard Life Global Absolute Return Strategies and RBS Autopilot." "We like the Standard Life GARS fund because of its multi-asset, multi-strategy aspect. It invests in a diverse range of derivatives, currencies, equities, commodities and much more. Very few Absolute Return funds have this kind of expertise in so many areas."
"It comes with a very good pedigree and is used by the Standard Life team as a key part of their pension. Its performance in the last six months hasn’t been great, but I can live with that for the time being."
According to FE Analytics data, the £8bn Standard Life Global Absolute Return Strategies fund has returned 19.53 per cent since it was launched in May 2008, outperforming the IMA Absolute Return sector by 12.93 per cent.
"The RBS UK Autopilot Index fund invests in a basket of four indices: developed market equities, emerging market equities, commodities and property," Shillito continued.
"Market trends are analysed on a monthly basis, and the portfolio repositions itself based on what asset class is trending at that precise moment."
"There’s a five-and-a-half year guarantee on the capital originally invested, though growth obviously can’t be guaranteed. However, it has got good downside protection."
Tom Becket, manager of PSigma Balanced Managed
"I like and own the Legg Mason Global Credit Absolute Return and Melchior European Absolute Return funds.""Both of these vehicles are run by managers whose skill and cynicism allow them to short companies and bonds very successfully. As a result both funds have demonstrated an ability to generate positive returns throughout the investment cycle."
"Such skills and abilities could be very useful in this ongoing chaos. Many absolute returns funds have disappointed since the sector was launched, but I believe that these two funds have the best chance of fulfilling the potential of the asset class."
"We added both of these funds to our portfolio in the last fortnight, in anticipation of treacherous market conditions."
The FSA offshore-recognised Legg Mason Global Credit Absolute Return fund is run by Western Asset Management and has $162m assets under management (AUM). It has lost 11.58 per cent since it was launched in May 2010.
Leonard Charlton’s Melchior European Absolute Return fund has returned 11.28 per cent since it was launched in February 2010.
In an interview with FE Trustnet earlier this year, Richard Jones, managing partner of Dalton Strategic Partners, said a severe market correction would bode well for the $507m vehicle.
Liz Savage, research director of Rathbones' multi-manager portfolios
"In our view, managed-futures funds are well positioned to take advantage of the current market dislocation. These strategies display equity-like levels of volatility, but historically they have displayed a lower correlation to risk assets, particularly during negative equity markets."
"Our preferred fund is Aspect Diversified Trends. This is a computer-driven strategy which seeks to profit by identifying medium-term trends, and takes long and short positions across a range of assets – equities, commodities, interest rates, government bonds and currencies."
"Two of the founding principles of Aspect Capital are involved in Man Group’s AHL managed futures programme, so the fund has a trusted management team too."
Aspect Diversified Trends is the fourth-largest holding in David Coombs’ Rathbone Multi-Asset Strategic Growth fund. It has returned 32.26 per cent since it was launched in March 2010.