The 17-page report, which may be viewed on The European Fund and Asset Management Association’s website, notes that the category of funds typically dubbed Newcits “are neither new products nor a new category of funds”, and, because they are “subject to and managed in compliance with the Ucits framework” they are just as robust as other Ucits products.
Adds the report: “The ‘Newcits’ label was coined by the media and should not be adopted by the industry or regulators. We do not believe that it is necessary or beneficial to have a specific label for these funds.”
Later, it says: “The term ‘Newcits’ incorrectly indicates the creation of a new type of product or a legal sub-category that is clearly defined and quite different from other Ucits. This is not the case, and the term should be avoided.”
Other conclusions of the EFAMA report:
• The universe and strategies of Ucits are continuing to evolve, “due to investor demand for risk reduction and return enhancement, which is a global trend”
• This evolution is encompassed by the Ucits regulatory framework, which is being further developed, especially under the UCITS IV framework that takes effect on 1 July
• "All Ucits and Ucits management companies are subject to the same detailed regulatory framework and must comply with it; the key issue is proper enforcement of the rules"
