Consultation on outcome-focused fund classification
09 February 2015 London
Image: Shutterstock
The Investment Association has launched a consultation on how to accommodate and effectively classify the growing number of outcome-focused funds.
Outcome-focused funds now represent about £30 billion in funds under management, or 3.3 percent of the total funds under management within the industry. There are now almost 200 funds with an outcome focus in the ‘unclassified’ sector.
The Investment Association has put forward two suggestions for consultation. The first involves setting up an new sector especially for outcome-focused funds.
This would sit alongside the existing ‘mixed investment’ sectors, and would exist on the basis that both mixed investment and outcome-focused funds vary their asset allocation, while the former has specified asset parameters, and the latter does not.
The second suggestion is a major reorganisation of the sector classification scheme. There would be two distinct areas; one for asset-based funds and another for outcome-focused funds.
This option would also include a filtering tool for outcome-focused funds, allowing users to select their criteria and view finds that are more alike. A similar filtering system is already in use for targeted absolute return funds.
Jonathan Lipkin, director of public policy at The Investment Association, said: “The investment fund universe is changing rapidly with a significant rise in the number of outcome-focused funds.”
“In looking at how to accommodate this trend, we have a number of options and an opportunity to take a fresh look at the overall shape of the sectors framework. We welcome input from all interested parties as we consider how to move forward.”
Industry participants are invited to respond to the consultation by 2 April 2015. The Investment Association will also run independent research with financial advisors to gather their views.
Outcome-focused funds now represent about £30 billion in funds under management, or 3.3 percent of the total funds under management within the industry. There are now almost 200 funds with an outcome focus in the ‘unclassified’ sector.
The Investment Association has put forward two suggestions for consultation. The first involves setting up an new sector especially for outcome-focused funds.
This would sit alongside the existing ‘mixed investment’ sectors, and would exist on the basis that both mixed investment and outcome-focused funds vary their asset allocation, while the former has specified asset parameters, and the latter does not.
The second suggestion is a major reorganisation of the sector classification scheme. There would be two distinct areas; one for asset-based funds and another for outcome-focused funds.
This option would also include a filtering tool for outcome-focused funds, allowing users to select their criteria and view finds that are more alike. A similar filtering system is already in use for targeted absolute return funds.
Jonathan Lipkin, director of public policy at The Investment Association, said: “The investment fund universe is changing rapidly with a significant rise in the number of outcome-focused funds.”
“In looking at how to accommodate this trend, we have a number of options and an opportunity to take a fresh look at the overall shape of the sectors framework. We welcome input from all interested parties as we consider how to move forward.”
Industry participants are invited to respond to the consultation by 2 April 2015. The Investment Association will also run independent research with financial advisors to gather their views.
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