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T.Bailey says IMA diversity shows multi-manager value

Multi-manager T.Bailey believes the diversity within IMA sectors highlights the added value of multi-manager funds relative to single manager funds.

The firm says direct comparisons between funds in the same sector can be difficult to make as some sectors contain a mixture of very different funds.

One fund in the IMA cautious managed sector will have the highest permitted equity content of 60 per cent but another fund in the sector may invest only 20 per cent in equities. Similarly, in the IMA UK all com- panies sector, some funds may have a mid-cap bias, which will lead it to behave differently com- pared with a blue-chip fund.

The IMA has attracted criticism from some quarters, with calls for the biggest sectors to be broken up, but T.Bailey believes the focus should be on investors being more aware of what they are buying.

The company is also against the segregation of multi-manager and single manager funds on a sector basis as it says it is important that investors are able to compare each approach in performance terms.

Co-fund manager Jason Britton says: “A lot of investors do invest of the basis of sector but just because funds fall in the same sector, it does not meant they are alike. The debate is really about caveat emptor.

“Multi-manager funds should be in the same sector as single manager funds. Only by doing that can investors see the value added by multi-manager funds in the way they rotate as they see opportunities.”

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