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Press Release

Friday 1 June 2012

IMA CONSULTS ON ABSOLUTE RETURN SECTOR REVIEW

The IMA has today issued a consultation on the IMA Absolute Return sector.  As well as considering redefinition and division of the sector, the IMA wants to group these new style returns-based funds coherently alongside its more traditional asset-based sectors.  In the context of a low interest rate environment and with concerns about volatility in the markets, investor demand for returns-based, or outcome orientated, funds is set to grow.  These funds, like all UK-authorised funds, are subject to extensive regulation.  

Three options are proposed:

  1. Sub divide the existing sector to indicate which funds are targeting more stable outcomes. The proxy for this new sector would be based on a cash benchmark(s); the other funds would remain under the umbrella of the existing sector.
  2. Sub divide the existing sector by hedge fund style categories e.g. long/short, global macro.
  3. Retain a single sector and let it continue to grow, but rename and redefine it and supply additional information on the IMA website to allow users to filter by a number of criteria such as assets, investment strategy and SRRI rating.

The three options reflect extensive discussions within the Sector Committee and respond to findings from qualitative research conducted with consumers and advisers. The place of the Absolute Return sector within the overall Sector Classification scheme is also considered.

Responses to the proposal are requested by 3 July 2012.  Further quantitative research will be considered to test or validate the chosen option(s).

A final conclusion on the sector is expected to be reached by the end of 2012.

-ENDS-

The full proposal on the Absolute Return sector review can be found here.

For further information please contact:
Mona Patel, Head of Communications
mpatel@investmentuk.org
020 7831 0898 or 07834 089332

Navdeep Sidhu, Press Officer
nsidhu@investmentuk.org
020 7831 0898 or 07843 517 618

Christina Bridge, Press Assistant
cbridge@investmentuk.org
020 7831 0898

Notes to Editors

  • The Absolute Return sector was launched in April 2008.
  • The main aim of the review is to make comparison of funds within the sector easier for consumers and advisers.
  • The Absolute Return sector is different from the other sectors in the classification scheme because the funds in it have in common a target outcome rather than investing in the same type of assets
  • There are 78 funds currently in the Absolute Return sector.

About the Investment Management Association
The IMA is the trade body for the UK's £3.9 trillion asset management industry.  

The money its members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.  

Our purpose is to support and promote a commercially successful and growing UK investment management industry as we seek to improve the financial outcomes for customers - savers and investors.

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