Riding the popularity of hedge funds, as well as a flat market, a number of money managers are launching mutual funds that deliver "absolute" returns. If recent history is any indication, however, they're success might be short-lived, a report form The Wall Street Journal reveals.
A focus on absolute returns, or steady gains when the markets are sluggish, is the philosophy that drives most hedge funds. Mutual funds, meanwhile, typically judge their performance against a benchmark. That means a mutual fund could lose money but still be successful if it beats its benchmark. Over the long-term, however, consistently beating a benchmark, or delivering "relative returns," usually portends good things for investors.