From 1 January, 2012, there will be no IMA Cautious Managed, Balanced Managed or Active Managed sector. Instead, using an equity-based definition, the new names and definitions are to be:
- Mixed Investment 0-35% Shares
- Mixed Investment 20-60% Shares
- Mixed Investment 40-85% Shares
- Flexible Investment
The newest Flexible Investment category replaces the Active Managed sector and allows an allocation of between 100% cash and 100% equities.
These new names may be effective from the start of next year but firms will have until 30 April to make any necessary changes to their funds.
The new naming convention follows discussions over the past couple of years among IFAs, fund-of-fund managers, platforms, consumers and, in the latest round of talks, the ABI. The IMA found that investors see the sector names as a signpost that helps them reach their final investment decision rather than it being the most important factor.
When the ABI did its consumer research, it found users wanted jargon-free names and that the mixed investment format was “significantly less likely” to lead to consumers misinterpreting the types of fund they invested in.
One emphasis the IMA is keen to get across is the ‘spirit’ of the sectors, saying: “Funds in the sectors which do not appear to comply with the ‘spirit’ of a definition will be removed from the sector. Funds will be issued with a warning before they are removed.”
