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I've been looking into a couple of investment funds and come across the terms "absolute" return" and "total return" fairly often. What is the exact meaning of these terms? How does the absolute return differ from the total return?
Hi there,
The terms "absolute return" and "total return" have similar meanings. Both indicate investments the primary aim of which is making ongoing profits. Both terms are often used in reference to investment funds.
The difference between the two are that total return investments include both income-generating and capital appreciation products and aim to deliver ongoing returns over the long-term. Absolute return investments aim to acheive returns over the short-term and generally include more risk.
Best regards from Moneyguru
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