Fidelity International UK managing director Gary Shaughnessy says that Fidelity disagrees with the IMA’s suggestions that names conveying funds’ flexibility is impossible and that asset allocation limits would be unwieldy.
As a counter-proposal, Fidelity has suggested names similar to those proposed by the ABI earlier this year. The firm has put forward the following suggested names:
Mixed investment – maximum 35% risk assets
Mixed investment – maximum 60% risk assets
Mixed investment – maximum 85% risk assets
Mixed investment – maximum 100% risk assets
"Our main criticism of the ABI names has been that by stating the equity content it implies that this is the only risk element in the fund,” Shaughnessy said.
“With derivatives now widely used and a number of other asset classes like property and commodities now common place in managed funds, this could be completely misleading. We believe that the amount the fund can invest in total in "risk assets" would be better.”
Fidelity adds that further details on these risk assets, and the risks present in all asset classes, could be included in the sector definition and/or notes.
