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IMA delays results of absolute return review until February

The Investment Management Association has pushed back the deadline for the results of its Absolute Return sector review until February 2013.

In May 2011, after its review of the managed funds sectors, the IMA said it would review the Absolute Return sector after it reached its third anniversary. The results were due to be announced at the end of 2011, however, this was delayed until June 2012 and then to the end of 2012.

IMA chief executive Daniel Godfrey says: “I am aware that we had hoped to have clarity on the future shape of the absolute return sector by the end of 2012.  This is an important issue for consumers and, having only taken over as chief executive this month, I want to consider all the evidence and all the options thoroughly before we take any final decision. 

“A great deal of research and work has already been done and the input from the industry has been excellent. I expect that we will be in a position to announce the conclusion of our review by the end of February.”

Earlier this year, the trade body outlined three options for the Absolute Return sector as part of its consultation on the sector’s future.

The IMA said it was considering redefining and dividing the sector and group the funds alongside traditional asset-based sectors.

One option being explored was to sub-divide the Absolute Return sector, indicating which funds are targeting more stable outcomes, based on cash benchmarks. Other funds would remain within the existing umbrella sector.

Another option would be to sub-divide the funds by hedge fund-style categories, such as long/short or global macro strategies. A further option is to keep funds within a single sector and allow it to grow, but rename and redefine it. Additional information would allow division by assets and investment strategy.

Last year Morningstar, which monitors funds for the IMA, announced it will create 18 sub-sectors as an alternative to the broad Absolute Return sector.

In a speech earlier this year, IMA director of markets Jane Lowe said the sector has been treated as “immature” by the asset manager trade body.

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