The new year is starting off with three new funds that may be indicative of at least one of 2007's big investment trends. The hot spot right now: absolute-return funds that aim to provide hefty returns despite whether equity or fixed-income markets are booming or busting.

According to Morningstar of Chicago, since the start of 2003, 26 new open-end, absolute-return funds have debuted, bringing the total to more than four dozen with assets of nearly $16.8 billion. These funds can employ hedge fund-like strategies or leverage to boost returns, combine long and short positions, or otherwise apply a more balanced market-neutral strategy.

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