Explore commonly used personal finance terms.
Absolute return is the total return on an investment, calculated as the gain or loss in value over a specific period, without comparing it to a benchmark. Absolute return focuses solely on the investment’s performance, making it a useful measure for assessing hedge funds and other alternative investments that aim to generate positive returns regardless of market conditions. It helps investors evaluate the success of an investment based solely on its profit, independent of broader market fluctuations.
