In a letter to members, the trade association floated the idea of a possible mid-cap sector and specifically asked UK mid-cap managers how they would define the new category.
Approximately fourteen vehicles in the UK All Companies sector would be affected by the new breakdown.
Presently, mid-cap vehicles like Paul Spencer’s Franklin UK Mid Cap fund, the £588m Neptune UK Mid Cap fund run by Mark Martin and the Schroders UK Mid 250 fund, headed by Andrew Brough, are all classified within UK All Companies.
At this time, the IA has not confirmed which funds are likely candidates for rebranding nor whether any funds from its UK Smaller Companies category could move up, if a mid-cap sector were created.
Darius McDermott, managing director of Chelsea Financial Services, came out in favour of the IA’s proposal, adding that Chelsea’s jointly owned ratings and research company FundCalibre has been comparing mid-cap funds against one another for a long time.
“We think this is a good idea,” he said.
“For many years, the mid-cap index has outperformed the FTSE100 and this has meant that the mid-cap funds have been near the top of the all company sector.
“There are over 15 such mid-cap funds and now they can be better compared against the index and each other.”
