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Sales of absolute and total return funds, which aim to achieve positive returns in all market conditions, have soared in some parts of Europe this year, according to Lipper.

In the first quarter, they attracted net inflows of EUR9.7bn compared to EUR11bn during the whole of last year.

For investors, the attraction of the funds has been boosted by a combination of low interest rates, economic uncertainty and stock market volatility.

Among product providers, hedge fund managers see absolute return funds as an opportunity to move into the mainstream mutual fund market.
The top selling absolute return fund in Q1 was the Standard Life Global Abs Return Strategy UK fund.

GAM Holding/Julius Baer of Switzerland is the top group for absolute return funds by both assets under management and Q1 sales.

The strongest following of absolute returns funds is in the UK and Italy, while in Germany and Belgium this year there were net redemptions.

Total net assets in absolute/total return funds stand at EUR132.5bn as at March 2010. At their 2006 peak, assets totalled EUR179bn.

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