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A Case for Absolute Return

A Case for Absolute Return

Posted December 24, 2025 at 10:00 am

Janus Henderson

In an era where disruption is becoming the norm, absolute return strategies can play a crucial role in helping to navigate uncertainty. In this paper we introduce some of the factors supporting the case for absolute return in the current market environment.

Key takeaways:

  • Absolute return strategies seek to generate positive returns regardless of market trends, utilising a diverse range of tools and sophisticated risk management techniques to help mitigate the impact of market volatility, potentially improving risk-adjusted returns.
  • By being uncorrelated with traditional equities and bonds, absolute return strategies can help to enhance diversification, offering a smoother return path in balanced portfolios, especially when traditional asset correlations weaken.
  • Absolute return strategies differ in objectives and management, with variations in asset class focus and geographical scope, providing diverse investment avenues tailored to different risk and return profiles.

Despite record stock market highs, heightened concerns about the risks of further market volatility have persisted, driving interest towards strategies capable of delivering performance regardless of the market backdrop.

In this environment, a well-managed absolute return strategy can give investors an additional tool to manage their exposure to risk, with the potential to generate a positive absolute return over time – participating in any equity market upside, while limiting the impact of any negative market periods.

In this paper, we look at some of the factors supporting the case for an allocation to an equities absolute return strategy.

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Originally Posted December 17, 2025 – A Case for Absolute Return

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Disclosure: Janus Henderson

The opinions and views expressed are as of the date published and are subject to change without notice. They are for information purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy, sell or hold any security, investment strategy or market sector. No forecasts can be guaranteed. Opinions and examples are meant as an illustration of broader themes and are not an indication of trading intent. It is not intended to indicate or imply that any illustration/example mentioned is now or was ever held in any portfolio. Janus Henderson Group plc through its subsidiaries may manage investment products with a financial interest in securities mentioned herein and any comments should not be construed as a reflection on the past or future profitability. There is no guarantee that the information supplied is accurate, complete, or timely, nor are there any warranties with regards to the results obtained from its use. Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value.

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Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Janus Henderson and is being posted with its permission. The views expressed in this material are solely those of the author and/or Janus Henderson and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

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