The Investment Management Association plans to rename the active, balanced and cautious Managed sectors managed A, B and C and create a new managed D peer group for the least risky managed funds.
The IMA says the move is designed to indicate that funds are ‘”managed’” and therefore more subject to “a degree of manager discretion”, or freedom to move money between different types of assets.
“Additionally, 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,” the group’s report explains.
The D sector sit below the current Cautious Managed in the “risk/reward hierarchy”, but its exact nature will be determined in a separate consultation.
The IMA will retain the Absolute Return label for the foreseeable future. However, the Managed D consultation will consider whether it should be included in the new sector.
Jane Lowe, the director of markets at the IMA, comments: “The changes we have outlined are intended to bring about a better understanding of the sectors and how they fit together.”