For Immediate Release: Tuesday 20 May 2003
IMA CONSULTS ON CHANGES TO FUND SECTORS
The IMA has announced that it is consulting on proposed changes to fund sector definitions. The IMA’s Performance Category Review Committee (PCRC) is suggesting changes to the European, Japanese and North American smaller companies sectors, as well as a revision to the definition of the UK Equity Income sector.
Currently smaller companies are defined as those within the bottom 10% of market capitalisation in Europe, Japan and North America. Monitoring of this sector by the IMA has shown that perceptions as to what constitutes a smaller company vary across markets. The UK Smaller Companies sector will not change.
The PCRC has proposed the following definitions:
- European Smaller Companies sector – smaller companies defined as those which form the bottom 20% by market capitalisation in the European market
- Japanese Smaller Companies sector – companies which form the bottom 30% by market capitalisation
- North American Smaller Companies sector – companies which form the bottom 20% by market capitalisation
The PCRC is also recommending an amendment to the definition of the UK Equity Income sector so that it refers to the gross yield on the underlying portfolio. This is to ensure that the sector can be properly monitored.
The new definition would read: “Funds which invest at least 80% of their assets in UK equities and which aim to achieve a yield on the underlying portfolio in excess of 110% of the FTSE All Share yield (net of tax). The distributable income may differ from the yield quoted in financial publications.”
Dorian Carrell, Head of Statistics at the IMA, commented:
“The changes in the smaller companies sectors are being suggested to bring the definitions into line with the market experience, allowing for differing interpretations of smaller companies in different geographic regions. The proposal for the UK Equity Income sector is simply to ensure it is possible to monitor funds in the sector. I look forward to hearing the views of IMA members.”
IMA Members will have until Friday June 6 to respond to the proposals.
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For further information, please contact:
Dorian Carrell, Head of Statistics, IMA, 020 7831 0898
Clare Arber, Head of Communications, IMA, 020 7831 0898
Notes to Editors:
- The current and full list of sectors and definition can be view on the IMA website, at: To help consumers identify funds from the 1,959 funds on offer they are categorised within a fund classification system. The system has over thirty different sectors. Each sector is made up of funds investing in similar assets, or the same stock-market sectors, or in the same geographical region. Funds are classified in this way to ensure that when comparing one fund with another, consumers are comparing funds with similar objectives or with similar underlying assets.
- The IMA is the trade body representing the UK asset management industry, representing some £2 trillion funds under management and over 99% of the UK investment funds industry (Unit Trusts and OEICs).
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