Standard Life Investments

Absolute Return Bonds

The Absolute Return Bonds strategy targets cash* +3% each year (gross of fees) over rolling three-year periods, with expected volatility of less than 5%. This is in line with historical bond-market levels of return but with less uncertainty.

To achieve this objective, we seek genuine diversification, investing across a wide range of fixed income investment opportunities in both traditional and advanced asset strategies. These include credit, government bonds and currencies. In addition, we routinely use a variety of conventional derivatives for investment and hedging purposes.

To maximise return potential, we combine a broad range of macro and tactical positions to create a portfolio of strategies that complement each other, chosen specifically to work well together in a wide array of economic outcomes.

Benefits of Absolute Return Bonds

  • Low-risk bond returns – the portfolio aims to deliver returns similar to those investors could expect from a long-term investment in global bond markets, but with lower risk.
  • Experienced investing teams – the portfolio combines the talent and skills of our over 60-strong fixed income team and our award-winning multi-asset investing team.
  • Performance across market conditions – using directional and relative value strategies, the portfolio targets positive returns whether markets are rising or falling.

*Cash is defined as 3-month US LIBOR