The Henderson UK Absolute Return fund follows a market neutral strategy, where equities are held both long and short to attempt to generate a positive return whether the market goes up or down. The strategy focuses predominantly on the UK equity market, however they also invest in European and North American equities.
They primarily look for trading opportunities; buying and shorting stocks based on their analysis of how a stock will react to economic data and news events, as well as identifying short term price trends. They will also look for fundamentally mispriced stocks that should appreciate or depreciate over the longer term, and will make use of derivatives to reduce their market exposure and protect the portfolio through market downturns.
We like the fund as over the long term, they have shown strong skill in stock picking and the ability to protect on the downside, as well as impressive returns with low volatility.