Understanding the Absolute Return Sector: A Q&A with Stephen Roussin (Part 1 of 2)

Stephen Roussin, the President of Campbell and Company, has over 25 years in the wealth management sector. A veteran of UBS Wealth Management, Roussin answers questions about absolute return investments.

Question: What is the absolute return sector?

Stephen Roussin: The absolute return sector encompasses funds that use a wider range of investment strategies than traditional mutual funds. This diversification allows the funds to produce a higher rate of return than traditional investments. For instance, absolute return funds can increase earnings through short selling, futures, derivatives and investments such as real estate or life insurance policies.

Question: What are the benefits of an absolute return fund?

Stephen Roussin: The funds can produce higher earnings because they are not tied to a particular strategy. With a savvy manager, these funds can exploit new markets and investments. If a fund is one of the first to enter into a particular sort of investment, the payoffs can be enormous.

In the second part of this article, Roussin will discuss the drawbacks to absolute return funds, and what steps regulators are considering to give investors more information.