Whatever changes the IMA makes will be criticised given the number of vested interests it has to satisfy, though the organisation has to be credited with the most recent set of changes introduced.
Its immediate focus has been on the controversial Managed sectors, with three of the four proposed categories launched on 1 January; another change introduced on the first day of the New Year was a new Global Equity Income sector which, from the point of view of both investors and fund groups, makes perfect sense.
Each is noticeable by an absentee – the Managed sector noticeable by the omission of an entire category, the Mixed Investment 0-35% Shares Sector; the Global Equity Income is missing the not inconsiderable £1.6bn M&G Global Dividend Fund.
The latest news on the former is that the fourth category – not initially established through a lack of interest from fund management groups – is back on the agenda with “a number of managers” looking to join to take it above the ten-membership minimum.
The latter is simply a case of the fund’s manager, Stuart Rhodes, not wanting to be constrained by the yield target of 110% placed on the Global Equity Income Sector.
There are more changes planned, with the IMA looking at a new European Equity Income category – the stumbling block currently being the lack of a ten-fund quorum – and the eagerly anticipated review of the Absolute Return sector that promises to be as lively and divisive as previous reviews. The fund management firms are expected to be sent the latest consultation paper towards the end of February, with analysis of the replies made sometime in the second quarter.
Another change in the development stages is the ability to allow investors access to more fund-specific detail through an entirely new consumer website. A spokesperson has confirmed that the work is still “on track” to be delivered in March and should “allow investor to search for funds bearing in mind what they are trying to achieve, without obviously offering any advice”.
Interestingly, the website development could well be the biggest single improvement to what the IMA offers investors and could negate the need for specific individual sectors, particularly if it is designed from the point of view of what investors want out of their investments rather than what they put in.
Hopefully this will be the longer-term aim of intermediaries and fund groups as well because if investors, intermediaries and product providers could all follow the same thought process, investing could be made far simpler.
Which element (if any) of the IMA’s recent sector work has impacted you most? Let us know below.
