Plans by the Investment Management Association (IMA) to change the names of managed sectors have been met with disdain by some in the industry, who claim the new designations are ‘meaningless’ and hard for investors to understand.
Managed sectors are currently divided into active, balanced and cautious, but the IMA plans to call them Managed A, B and C from now on, with a fourth Managed D class for the least risky managed funds.
The IMA’s report says “the names are intended deliberately to provide no other information about the sector, thereby encouraging users of the sectors to do more due diligence to understand the nature of funds that would fall into the underlying sectors”.
But critics say the move is a wasted opportunity to provide meaningful sector definitions.
“To say we are disappointed in the outcome to this review is an understatement,” said Gary Shaughnessy, UK managing director at Fidelity International. “The IMA has said that it is important that these sectors are properly understood by investors, but in our opinion the new sector differentiations are meaningless and actually increase the opacity for investors.”
He adds: “At a time when transparency and understanding are key for our industry to engage with our customers, this seems a retrograde step and we urge the IMA to think again.”
©2011 funds europe
