A Global Targeted Returns Fund is a specialized multi-asset investment strategy that aims to deliver consistent, positive returns under varying market conditions. In practice, it combines a global reach (investing across countries and regions) with an absolute or targeted return objective. Invesco, for example, launched its Global Targeted Returns Fund in 2013 with a clear goal: “achieving a positive total return in all market conditions over a rolling three-year period”. In other words, managers set a target return (often expressed above a benchmark like Libor or cash rates) and strive to hit it while controlling volatility. These funds invest
“in good investment ideas, anywhere in the world,” blending diverse assets to pursue positive returns in all markets. This approach contrasts with traditional funds that simply track a stock or bond index. Instead, a global targeted returns strategy uses broad diversification, active asset allocation, hedging and leverage to meet its goals.
Investors might hear such funds called absolute return, multi-asset target return, or absolute return multi-asset funds. As Investopedia explains, an absolute return fund (also known as a “target return fund”) “seeks to make positive returns by employing investment management techniques that differ from traditional mutual funds,” including shorts, derivatives, and leverage. In our context, a global targeted returns fund is essentially an absolute return-style, multi-asset portfolio with a defined performance target. It might allocate across equities, bonds, currencies, commodities, and alternatives worldwide, with the flexibility to go long or short. The idea is to pursue steady gains with lower volatility than global equities, thanks to rigorous risk management and diversification.
By design, these funds emphasize diversification and risk management. Invesco’s marketing highlights that its fund invests in ideas “not constrained by geography or asset class” and blends them into a “highly diversified, risk-managed portfolio with the potential to benefit from the upside and minimize the downside”. In practice, that means the managers will scour global markets for opportunities (stocks, bonds, currencies, etc.) and dynamically allocate capital. The portfolio may tilt toward assets expected to rise while hedging or avoiding those likely to fall. As BlackRock notes, multi-asset strategies “combine different types of asset classes to create a nimble and broadly diversified portfolio” – the very essence of a global targeted returns approach.
Key Points: What Is a Global Targeted Returns Fund?
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It is a multi-asset, absolute-return style fund that invests globally across stocks, bonds, cash and alternatives.
- It sets a return target (e.g. “5% above cash”) and aims for positive returns in all markets.
- It emphasizes diversification and risk control: aiming for equity-like gains with lower volatility.
- It uses active strategies (long/short positions, currency plays, derivatives) to achieve goals while managing drawdowns.
Figure: Example of a global market chart illustrating diverse assets. Global targeted returns funds use such broad market data to construct diversified portfolios aimed at consistent, positive returns.
How Global Targeted Returns Funds Work
How does a Global Targeted Returns Fund operate?
In simple terms, managers combine multiple asset classes into one strategy and target a specific return level, often above cash rates or benchmarks. They then use research and market insights to allocate across global opportunities. This process typically involves:
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Strategic & Tactical Asset Allocation:
A mix of long and short positions in equities, bonds, currencies, commodities and sometimes hedge instruments. For instance, if global stocks are expected to rally, the fund may go long equities; if a downturn is foreseen, it may hedge with bonds or short positions.
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Risk/Return Targeting:
Most funds set a clear goal – e.g., “5% above 3-month LIBOR with volatility capped” as Invesco’s fund did. Managers continuously adjust positions to stay on track for that target.
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Diversification:
By definition, the fund is global and multi-asset, spreading investments across regions and sectors. This broad diversification is meant to smooth returns. For example, losses in one market (say, stocks) might be offset by gains in another (like bonds or currencies). Invesco notes its managers hunt for ideas “anywhere in the world” to build a global portfolio.
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Risk Management and Hedging:
These funds often employ hedging strategies (using derivatives, options, etc.) to limit downside. They may cut risk by scaling back positions or using defensive instruments if markets turn volatile. The goal is to keep volatility “less than half” that of equities, as Invesco targeted.
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Dynamic Rebalancing:
The fund’s allocation isn’t static. Managers rebalance based on changing market conditions. When an asset class underperforms, they may shift resources to stronger areas, always keeping the return target in mind.
In practice, this means a Global Targeted Returns Fund acts somewhat like a “portable alpha” engine. It looks for alpha (excess returns) around the world while pegging absolute returns. For example, if global economies slow, the fund might lean into safe-haven government bonds or defensive stocks, whereas if emerging markets boom, it might increase exposure there. This dynamic, flexible approach aims to capture growth wherever it occurs. As Barings describes its own Multi Asset Target Return strategy, it can “deliver a targeted return over cash or inflation that is equivalent to long-term equity returns but with considerably less risk”.
Key characteristics of how the fund works include:
- Defined Return Goal: The team explicitly specifies a return target (e.g. “LIBOR + 5%”) and aligns every decision to achieve it.
- Global Research-Driven Picks: Analysts identify attractive opportunities worldwide, literally “scouring the earth” for ideas.
- All-weather Orientation: By aiming for returns in “all market conditions”, the fund is built to profit in bull or bear markets.
- Multi-Asset Flexibility: It can pivot between stocks, bonds, currencies, etc., unconfined by traditional fund style boxes. For instance, a dedicated “global absolute return fund” or “balanced fund” might stick to strict equity/bond mixes, whereas targeted returns funds freely mix asset classes to meet their objective.
These strategies often make heavy use of alternative risk premia and derivatives. For instance, they may go long volatility or use futures to express views cheaply. The overall philosophy is opportunistic yet disciplined: capture upside where possible, hedge downside, and keep an eye on volatility.

Global Multi-Asset & Absolute Return Funds
Global Targeted Returns Funds sit at the intersection of multi-asset and absolute return strategies. Understanding these terms helps clarify the concept:
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Multi-Asset Funds:
These invest across multiple asset classes. As BlackRock puts it, multi-asset strategies “combine different types of asset classes to create a nimble and broadly diversified portfolio”. A global targeted fund is inherently multi-asset: it might hold stocks, bonds, commodities, currency positions, and alternative instruments simultaneously. This broad scope allows more levers to hit its return goal.
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Global Funds:
Emphasize international diversification. Rather than focusing on one region, the strategy can invest in any country or market. This global reach seeks to capture growth opportunities in emerging or developed markets, and to spread risk.
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Absolute Return Funds:
These target positive returns independent of market benchmarks. Traditional funds aim to beat a stock index (relative return), whereas absolute return funds aim for positive gains regardless of market direction. A global targeted returns fund is a type of absolute return fund — it doesn’t benchmark to, say, the S&P 500, but to its own return target.
- For example, a well-known absolute return fund is Standard Life’s Global Absolute Return Strategies (GARS). GARS had a similar aim of steady returns and was managed by multi-asset teams. In 2014, when Invesco launched its Global Targeted Returns as a rival to GARS, the philosophy was clear: “Target a gross return of 5% a year over UK three-month Libor, with less than half the volatility of global equities”. Both funds were global (seeking opportunities worldwide) and multi-asset.
How are these funds different? A key distinction is flexibility. A typical multi-asset balanced fund might have fixed allocations (e.g., 60% stocks, 40% bonds) and rebalance periodically. A global targeted returns fund, by contrast, has no fixed mix. It can go to 0% stocks if it foresees turmoil, or 100% equities if confidence is high, or even adopt negative equity exposure. It may also hold cash or treasuries almost all the time if markets get dicey, always aiming to preserve capital and hit its return target. In this sense, targeted returns funds are often managed more like hedge funds within a mutual fund structure (for qualified investors).
Similar Funds and Terms
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Global Multi-Asset Fund:
A broad category of funds (not always absolute return) that invest globally across asset classes. Some multi-asset funds have return targets; others just aim for growth or income.
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Global Absolute Return Fund:
Often used interchangeably. Emphasizes the absolute return objective.
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Targeted Returns Investment Fund:
Another label for a fund with a set return goal.
In practice, many large asset managers offered a “global targeted returns” or “global absolute return” product, especially post-2008. For example, Invesco’s fund, BlackRock’s Global Allocation fund (though that one is benchmark relative), and others. The concept is similar: deliver a smooth return profile by exploiting global opportunities.
Benefits of a Global Targeted Returns Fund
Why might an investor consider this type of fund? Global targeted returns funds offer several potential advantages:
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Diversification:
Because they invest in multiple asset classes across regions, these funds can spread risk. One sector or country’s slump might be offset by gains elsewhere. Invesco highlights that its strategy is unconstrained, allowing “ideas from anywhere in the world”. This breadth can reduce correlation with any single market.
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Consistent Return Objective:
The explicit goal of positive returns in all conditions appeals to investors seeking stability. Instead of suffering huge losses in a market crash, a targeted returns fund is designed to limit drawdowns. In fact, Invesco set a volatility target “less than half that of global equities”, aiming for equity-like returns with bond-like risk.
Key benefits include:
- Broad Diversification: across geography and asset classes for lower overall portfolio volatility.
- Absolute Return Focus: aims for positive gains in all markets, which helps during downturns.
- Active Management: experts adjusting the portfolio to market changes.
In summary, a Global Targeted Returns Fund offers a one-stop solution for investors seeking a “balanced yet opportunistic” portfolio. You get a single vehicle that might replace a mix of regional and asset-specific funds. It’s essentially outsourcing your asset allocation to a specialist team whose goal is capital preservation plus consistent growth.
Risks and Considerations
While the strategy sounds attractive, there are important caveats and risks:
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No Guarantees:
Despite the target, there’s no guarantee of returns. Market conditions can still cause losses. As Invesco’s own fund experience shows, such targets may not be met. In fact, Invesco’s Global Targeted Returns Fund “struggled mightily” in recent years, returning only 0.33% over a five-year span. Even though the goal was a steady return, it underperformed, highlighting that complex strategies can falter.
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Complexity and Cost:
These funds often incur higher fees than plain-index funds. They may involve multiple sub-managers or derivatives, and thus costs can mount. Additionally, the complexity of positions means performance can be hard to predict and understand. Investors should be comfortable trusting the manager’s skill.
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Market Timing Risk:
The success of the strategy often depends on getting macro calls right. If the fund is whipsawed by rapid market changes (e.g., wrong asset at wrong time), it can underperform. The 2020-2023 period of low volatility and rising markets proved challenging for many absolute return funds, as they sometimes sat in safe assets while equities rose, or used hedges that cost money in sideways markets.
Investing in Global Targeted Returns Funds
If you’re considering investing, here are some pointers on how and where such funds fit in a portfolio:
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Access:
Many global targeted returns strategies are packaged as mutual funds or ETFs, but some may be limited to institutional or high-net-worth investors. Invesco, for example, offered its fund in share classes for retail investors (GLTRX, GLTCX in the U.S.) and separate accounts. Other managers like Schroders, BlackRock, or GAM may offer similar products. Look for funds explicitly labeled “target return” or “absolute return” in the multi-asset category.
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Investment Objective:
Read the fund’s Prospectus or Key Facts Statement. It will state the return target (if any), volatility target, and asset range. Make sure the stated goals align with your expectations (e.g., some target 3-5% above cash; others aim for inflation+4%).
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Fees and Structure:
Many are actively managed open-end funds with performance fees or high expenses. Some may be unit trusts or even hedge fund structures. Check if the fees are reasonable for the complexity provided.
A Global Fund Investment Guide: When selecting, treat these funds like choosing an expert manager. Check the management team’s experience in multi-asset investing. Look at the fund’s size and liquidity (very small funds may be fragile). Consider blending: some investors mix a targeted returns fund with traditional funds to balance innovation with proven strategies.
Important Reminder: Never invest based solely on the “target”. Instead, focus on the process and track record. Good funds are transparent about their approach. Many publish monthly or quarterly reports explaining position changes. Use those to gauge whether the strategy makes sense.
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Frequently Asked Questions
Q: What exactly is a Global Targeted Returns Fund?
A Global Targeted Returns Fund is an investment fund that aims to generate positive returns across market cycles by investing in a diversified, global portfolio of assets. It sets a specific return objective (for example, a certain percentage above cash rates) and uses active management and risk controls to pursue it.
Q: How does a targeted returns fund differ from a regular multi-asset fund?
While both are multi-asset, a targeted returns fund has an absolute return mandate. It explicitly seeks positive gains in most conditions, regardless of market direction. A typical multi-asset fund may aim for growth relative to an index or a fixed allocation. Targeted funds use hedging and flexible positioning to achieve steadier returns, whereas ordinary funds might simply rebalance fixed equity/bond mixes.
Q: What strategies do these funds use?
They use broad strategies: long/short equities, global bonds, currency trades, commodity positions, and derivatives (options, futures) for hedging or leverage. The exact mix varies, but the common thread is dynamic allocation based on market outlook, plus hedges to protect against downturns.
Conclusion
Global Targeted Returns Funds offer investors a complete guide to global diversification with a targeted objective. By blending global multi-asset investing and absolute return techniques, they seek to deliver smooth, positive returns while managing risk. This complete guide has explained their structure, strategy, and potential benefits – from enhanced diversification to volatility control. We’ve also highlighted the important risks and track record to consider.
If you’re an investor curious about global fund investment strategies, these funds represent a distinct approach: a single vehicle to access worldwide opportunities with an aim for consistency. Before investing, review the fund’s facts, track record, and fees. If you decide it fits your portfolio, it could be a powerful tool for balanced growth.