Jun 23, 2026 · 24 min · 10 segments
**Season 02 Episode 28** With inflation expectations on the rise, volatility has returned, and stocks and bonds are increasingly moving together. This is driving interest in uncorrelated and…
Bill EigenGuestAaron MulvihillHostCan you talk a little bit about where does an absolute return fund fit into a portfolio?
The key thing that people need to remember about a true absolute return discipline is that, number one, it requires really a lot of focus, a lot of dedication.
It really should be the only thing you do because it's such a complicated opportunity set.
And if your pure focus is on consistently beating the risk-free rate at all times, sometimes by a lot, sometimes by a little, all depending on what the opportunity set has to offer, you have to be very vigilant about that.
How do you achieve an uncorrelated strategy? And can you give me maybe some examples of areas of the market you go into to get this lack of correlation?
Historically, we've bought anything from close-end funds to ETFs to traditional high-yield securities, all forms of credit, securitized, non-securitized.
And the wonderful thing about it is the mathematics dictate what we're going to do.
So you don't get much more for taking credit risk than you do when owning treasuries, right? In fact, you're getting paid the least amount for default risk right now in the market than you ever have been in history.
You know, that's part of the reason why we don't look like everyone else, so we're not gonna be correlated like everyone else.
Now, there are short periods of time Where we do have correlation, that's close to the market.
And so I should say we're recording this on May 20th because the world is changing very, very quickly.
Can you talk a little bit about where does an absolute return fund fit into a portfolio?
The key thing that people need to remember about a true absolute return discipline is that, number one, it requires really a lot of focus, a lot of dedication.
It really should be the only thing you do because it's such a complicated opportunity set.
And if your pure focus is on consistently beating the risk-free rate at all times, sometimes by a lot, sometimes by a little, all depending on what the opportunity set has to offer, you have to be very vigilant about that.
How do you achieve an uncorrelated strategy? And can you give me maybe some examples of areas of the market you go into to get this lack of correlation?
Historically, we've bought anything from close-end funds to ETFs to traditional high-yield securities, all forms of credit, securitized, non-securitized.
And the wonderful thing about it is the mathematics dictate what we're going to do.
So you don't get much more for taking credit risk than you do when owning treasuries, right? In fact, you're getting paid the least amount for default risk right now in the market than you ever have been in history.
You know, that's part of the reason why we don't look like everyone else, so we're not gonna be correlated like everyone else.
Now, there are short periods of time Where we do have correlation, that's close to the market.
And so I should say we're recording this on May 20th because the world is changing very, very quickly.
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