Two of Absolute Asset Management's three funds recorded positive returns in December. The Absolute Macro Diversified Fund was up +1.45% (-23.53% in 2008) while the Asian REIT Property Fund gained +1.23% (down -49.38% in 2008 including dividend). The Absolute Trading 1 Fund was down -0.80% in December (+5.54% in 2008).
The manager noted that there are some signs the long decline in REIT values was coming to an end, noting positive indicators in Hong Kong and Singapore property markets. Australian REITs however continued to underperform, and the fund believes a reduction in exposure to the Australian sector may be warranted.
The Absolute Macro Diversified Fund ended 2008 strongly after a difficult year, mostly due to positive returns in emerging markets and China equities, and in gold. The fund will look to reduce cash balances in the medium term as volatility decreases. Unlike some other hedge funds, the fund remains open to new investment and redemptions during this difficult period.
Although it was down in December, the Absolute Trading 1 Fund was positive for 2008. The fund profited from closing out its short NZD position, but lost on other positions due to the recent strength of the US dollar.
