Investment Association launches Volatility Managed sector

market investment chartThe Investment Association has launched a new Volatility Managed sector following its 16-month sector review into outcome-focused funds.

The new sector, which will go live in November, will include funds that target clients’ attitude to risk, set out in terms of volatility and will include as many as 120 funds currently sitting in the Unclassified sector.

The trade body started its sector review in February 2015 in particular focusing on the outcome-oriented funds sitting in its Unclassified group.

The new sector will have “a high hurdle of transparency”, the Investment Association said, as funds will be required to publicly disclose that they are managed to deliver a volatility or risk outcome as well as provide detailed information on how that volatility is measured.

The Investment Association might also consult on multi-asset income funds, an IA spokeswoman says.

Investment Association director of capital markets Galina Dimitrova says: “The IA sectors always look to evolve alongside the universe of investment funds available to investors, and the launch of the Volatility Managed sector is an important step to grouping more outcome-focused funds together for the benefit of consumers and advisers when making investment decisions.

“We will continue to work with our members, advisers and consumer groups to ensure that the sector definitions resonate with the investment funds the industry offers.”