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Mutual Fund Q&A: 
The Absolute Mix
Author: Ticker Magazine
123jump.com
Last Update: 11:33 AM EDT April 24 2006


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Quite unusual for the mutual fund marketplace, the Absolute Strategies fund doesn’t choose the investments, but seeks the perfect mix of asset classes, strategies, and managers. The goal is absolute return with low volatility and low correlation with the market so that investors would not have to take losses every time the market takes a downturn. As a fringe benefit, it brings institutional approach in money management to the retail investor.

 
A: We are mostly trying to minimize market or systemic risk across the portfolio. That’s where we’re measuring to various risk factors or beta factors. How much risk do we have in our portfolio coming from the overall market? We measure it not just versus S&P beta, but from the small-cap or large-cap segments, or for interest rate risk, to see if there’s any significant beta against those different factors.
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