Obviously, markets do not go up all the time, so to do this the funds use a variety of strategies that conventional funds avoid.

These include strategies borrowed from hedge funds, such as shorting, using futures, options or derivatives.

But understandably, there seems to be a few myths about how absolute returns funds work - many advisers are still unclear exactly how they work.

Financial Adviser has conducted some research into advisers’ attitudes to absolute returns, and how they use them.

For those that do use them, advisers tend to have a cautious approach. The favourite aspect of absolute returns is the multi-asset role - which far outweighs the ability to short, use derivatives or conviction stocks.

They also tend to go for fund factsheets as a guide to the type of fund to choose, although some find some of it a little confusing.

The most compelling reason advisers will use absolute return funds is for portfolio diversification, and they tend to be used for clients with a significant amount of money to invest – largely over £50,000.

However, they only form a small part of a client’s portfolio, with the majority using it for 20 per cent or less than the client’s investable assets.

Absolute returns have not been as established as some of the more mainstream investment funds, but are fast becoming a useful, albeit not a central part of an adviser’s armoury.

Melanie Tringham is features editor of Financial Adviser