Absolute return

The return that an investment produces over a certain period of time. If a stock is bought from £1 and sold for £1.33 it has an absolute return of 33%. Unlike relative return, absolute return does not compare and investment’s returns to a benchmark or similar investments. Absolute return funds aim to generate positive returns by using investment strategies outside of those by mutual funds such as short selling, arbitrage, derivatives and leverage.

This definition is for general information purposes only