As part of the largest review of its sectors in a decade—announced this morning—the Investment Management Association (IMA) has asked members whether it would be helpful to sub-divide the sectors or introduce a new means of sorting between funds in the same peer group.
Sub-division would help separate out disparate products in the same sector and would enable more precise performance comparisons.
Below is Fund Strategy’s reconstruction of how the sectors would look if the IMA sub-divided them according to objective, as opposed to investment strategy or performance, where divergence is far greater.
Any comments below the list would be appreciated, together with as many details as possible about the respondent and the context for the response.
Sub-divisions which would probably hold less than 10 funds as the sectors stand are given in brackets.
Ten funds is usually the minimum number the IMA will consider before creating a new peer group, although no set minimum for sub-divisions is currently available as consultations are at such an early stage.
Specialist products which do not fall within the sub-divisions—including some ethical, international bond and property funds—could move into the specialist sector under its current terms. The IMA has not included this proposal in its consultation.
Funds might have to apply to a particular sub-division and stay in it to avoid constant shuffling between sub-sectors.
Sub-divisions are not given for sectors which might not warrant it under the terms of the reconstruction.
Potential sub-divisions are as follows:
UK All Companies: UK All Cap, UK Large Cap UK Mid Cap, UK All Cap Ethical, UK Growth & Income
Japan: Japan Growth, Japan Income
Asia Pacific ex Japan: Asia Pacific ex Japan Growth, China, India [both incorporating funds from the Specialist sector], [Asia Pacific ex Japan Income]
North America: North America Growth, [North America Income]
Europe ex UK: Europe ex UK Growth, Europe ex UK Income
Global [renaming intentional]: Global Growth, Global Income
Global Emerging Markets: Global Emerging Markets Growth, [Global Emerging Markets Income]
Cautious Managed: Cautious Managed Growth, Cautious Managed Income (list continues below)
Balanced Managed: Balanced Managed Growth, [Balanced Managed Income]
Active Managed: Active Managed Growth, [Active Managed Income]
Global Bond: Global Bond, [Global Emerging Markets Bond]
Property: UK Property, Global Property
Specialist: General Specialist, Latin America, Environmental [incorporating funds from the Global Growth sector], [Emerging Europe], [Financials], [Healthcare], [Resources], [Industrial Commodities], [Soft Commodities], [Precious Metals]
Absolute Return: Absolute Return Equity, Absolute Return Bond, Absolute Return Multi-Asset