A flexible fund for volatile times

Many equity funds find it difficult to maintain the value of their clients' assets during long periods of market volatility. Andy Parsons, Advice team manager at The Share Centre, explains why he believes the Blackrock Absolute Alpha fund could just be flexible enough to steer its way through a choppy market.

"The Blackrock Absolute Alpha fund seeks to generate capital growth in any market condition by taking both long and short investment positions. The methodology of this fund is therefore very different from that of traditional long-only funds that attempt to outperform either their relative stock market or peer group.

"It is fair to say that investor confidence has taken a battering over the last six-to-twelve months, but this type of fund could prove to offer fund investors the flexibility many desire. The Blackrock UK Absolute Alpha fund uses derivatives and other investment tools to maintain both long and short positions in order to produce returns that are exposed to less volatility than those of a traditional fund. In essence, it allows the manager to profit from rising markets as well as falling markets.

"The Blackrock UK Absolute Alpha fund is suitable for investors who want to remain exposed to UK equities during volatile or flat market conditions, and who are comfortable accepting a medium degree of risk."