What is an absolute return?
Will point to point of return or absolute return is one of the easiest to understand, let's say the
net asset value of of one unit is, let's say one hundred.
And after five years, it becomes two hundred.
So that's one hundred percent return in five years.
So that's a point to point the return.
So from one point to another point, one hundred to two hundred, that's one hundred percent return.
That is what is called the absolute return.
The problem with absolute return is that it doesn't factor in what has happened in between the in between
the two points.
So in between within those five years, if the market had crashed, that is not captured in the point-to-point
return.
It is just looking at one particular moment in time and comparing it with another particular moment
in time.
So if you are a hundred to two hundred, that's one hundred percent triple that return is quoted as
a point to point return or an absolute return.