COMPANY PROFILE

Why Absolute Return?

The argument for an absolute return or long/short strategy over a traditional long-only strategy is simple: long-only funds perform well in strong markets but struggle when markets are volatile; whereas long/short funds can profit from both rising and falling stocks for positive performance during all market conditions.

A long/short strategy provides greater capital protection and the ability to perform in unpredictable markets. The flexibility to be fully invested long, to sell short or invest in cash provides the potential to deliver consistent positive returns.

During unpredictable markets relative return strategies (investing relative to an index) may outperform the index, but still produce negative returns. This scenario is a critical flaw in relative return investments. The ability to preserve capital and produce consistent positive returns for the investor are the driving forces behind K2's creation of its long/short funds and its own performance benchmark.