Commenting on the ongoing investment environment, veteran investment manager Jon Gumpel of Aubrey Capital Management has said that "In an inflationary world, benchmarking to cash simply does not make sense".

"I have been asked quite a lot why my focus is now on defensive income, why we are not in the Targeted Absolute Return sector and why I am at Aubrey."

"My focus is on defensive income because in a world that has lost its compass on many things, and quite particularly in the investment world, a sustainable growing income is, I believe, the surest way to both maintain valuation discipline and to chart a course through the difficult waters ahead. I do not want my hands tied by anything that hampers the steering. The absolute return sector adds that burden on a manager and, while that was fine in the last 10-15 years of low inflation, it is not appropriate going forward. In an inflationary world, benchmarking to cash simply does not make sense."

"For the same reason I think that equities, or rather a specific subset of global equities, is going to offer the best hope for enduring defensive income growth returns. That is why Aubrey is such a good home, with the ability to help me create a cost-effective portfolio of global equites to suit the environment. I have known some of the team here for a long time and quite apart from anything else it is a great group of people and a very nice place to work, which is an important thing in itself."

Gumpel joined Aubrey as investment manager and director in July 2020, having spent 28 years at Brooks Macdonald where he was a founding director. The business had some £13bn of funds under management by October 2019 when he left.

In March 2022, Aubrey took over the Sentinel Navigator Fund mandate. In September, it launched the Aubrey Citadel Fund, with Gumpel involved in both.

The UK's Investment Association (IA) lists its requirements of Targeted Absolute Return funds online thus:

"We require TAR sector funds to be managed with the aim of achieving a positive return after fees in any market conditions (though returns are not guaranteed) and to clearly state the timeframe (up to three years) in which they aim to meet their stated objective."

"Funds in this sector may aim to achieve a return more demanding than a ‘greater than zero after fees objective' and the tool records this additional objective."

The 'tools' referred to are available via the IA's website (https://www.theia.org/industry-data/fund-sectors/tar-tool) which show that there are significant variations in return even among funds that are aiming for similar risk ratings - as illustrated by the examples of funds with a risk rating of 2 versus 7 below.

Furthermore, the targeted timeframe for returns, and the benchmarks used vary considerably, as illustrated below.