A fully flexible way to invest
3 minute read
Being able to profit from a rise in share prices is rule number one of investing. But being able to profit from share prices that fall is a strategy that professional investors are able to do as well. Being able to find an investment fund that combines both could be an interesting addition to a diversified investment portfolio.
Who's it for? All investors
Buy low, sell high. Investors buy shares in companies that they hope will go up. Once the share price has risen, the shares are sold and the profit is banked. That’s simple, and obvious. But what if you don’t believe a company’s shares will rise? Maybe you feel they are currently too expensive? Or that their competitors will place too much pressure on profits? What would you do?
Simple – you don’t buy their shares. But there is another way, by which professional investors and fund managers can make money from the shares of companies they believe could fall in value. It is called ‘shorting’.
‘Shorting’ the shares of a company involves a simple process of selling the shares of a company today in the hope of buying them back at a lower price in the future. The investor will profit if the share price falls. However, if the share price rises, the investor will lose money.
Investing in shares with the hope that they go up, and in the shares of companies that are expected to fall in price, is a strategy the team at Janus Henderson have been doing for over 10 years. The aim of the Janus Henderson Absolute Return Fund is to provide a positive (absolute) return regardless of market conditions over any 12-month period.
The fund also aims to outperform the UK base interest rate over any 3-year period. A positive return is not guaranteed over this or any other time period and, particularly over the shorter term, the fund may experience periods of negative returns. As a result, your capital investment is at risk.
Combining these two contrasting ways of investing results in an investment fund that looks very different to many others. When we talk about building an investment portfolio we stress the need to diversify. This means having different types of funds in your investment portfolio that behave differently to each other.
There is no guarantee that this fund will give you the target return each year, but what it aims to do is to perform differently to many other funds that invest in shares and bonds. If you are looking to diversify your investment portfolio, this could be an interesting fund to consider.
The Janus Henderson Absolute Return Fund sits in a group of funds called the ‘Targeted Absolute Returns’ sector. The Barclays Funds List contains one other fund in this sector, which also aims to add diversification to an investment portfolio. Find out more information on these funds.
Correct at the time of publishing.
To diversify your investment, you may like to consider our own Barclays Ready-made Investments (RMI). The RMI are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These multi-asset funds invest in passive funds across a range of asset classes and regions, offering a globally diversified solution for investors. Ready-made Investments are not the only funds that we offer and they won’t be appropriate for everyone.
Past performance of the fund and its manager are not a reliable indicator of their future performance.
We don’t offer personal investment advice so if you’re unsure you should seek that independently.
Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.
These are our current opinions but the future, as ever, is uncertain and outcomes may differ.
Read the Assessment of Value report [PDF, 3.2MB] for funds run by Barclays.
The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and their effects on you will depend on your individual circumstances.
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