can anbody tells me what is the meaning of Absolute return associated with a Mutual fund?

Question

Plz clarify with example

Answer 1

Absolute return refers to actual return of investment...what you actually make. This term is often used to differentiate from relative return. A mutual fund will often tell you how it did relative to an index (ie: beat it by 10%). However, if the index is down 20%, your absolute return is -10%...you lost money.

But keep in mind, it's only one piece of information that needs to be taken in context with all the available facts to make an informed decision.

Answer 2

I am not familiar with any absolute returns associated with mutual funds. Open ended mutual funds trade at net asset value, less any front end charge. If the value of the net assets declines then the value of the mutual fund declines and vice versa.

There is a term called historic return, which is the increase in net assets during prior years.