IMA readies delayed fourth Managed sector

The IMA could be ready to launch its delayed fourth Managed sector in the coming months, following a pick-up in interest from fund groups.

Last week saw the launch of three new sectors – Mixed Investment 20-60% Shares, Mixed Investment 40-85% Shares, and Flexible Investment – which have been  populated with funds in the now defunct Cautious, Balanced and Active Managed sectors.

However, despite the IMA announcing in November there would be a fourth sector, Mixed Investment 0%-35% Shares, there were not enough funds to launch the group on 1 January.

Just eight funds initially applied to be part of the sector, including the £469m AXA Defensive Distribution fund run by Richard Marwood (pictured), but the IMA said it will only launch when there are ten.

At the time of going to press, it was confirmed a ninth fund would move to the sector, while another group told Investment Week it will launch a fund specifically for that peer group by the beginning of Q2.

The new names and definitions of the Managed sectors match those used by the ABI, which has roughly 151 funds in the 0-35% Shares sector.

The IMA said it cannot disclose which funds have opted to move to the sector when it is launched, but a number of groups including Threadneedle, Insight and Architas said they are reviewing their relevant funds’ positions.

Of the nine funds slated to move so far, six sit in the Mixed Investment 20-60% Shares sector, two are in Unclassified and one is in Specialist.

Investment Week has also found of those funds in the 20-60% Shares sector, around 20 match the criteria for the 0-35% Shares sector, according to asset allocation data from Morningstar. The funds are required to have less than 35% in equities and more than 45% in fixed income and cash.

Architas CIO Caspar Rock said he is “studying the sector closely” with regards to the Architas MM Conservative Portfolio.

“I think it will be a useful sector and there is definitely appetite for those kinds of funds from risk averse clients who understand the need to take a bit more risk, as opposed to putting money in deposit accounts, in order to obtain returns.”

Other potential candidates which match the sector’s criteria include Insight’s Diversified High Income fund, managed by Steve Waddington and Mike Pinggera, and Threadneedle Defensive Equity & Bond fund, run by Quentin Fitzsimmons.

Meanwhile, the IMA unveiled the Global Equity Income sector on 1 January, which 20 funds have populated.

The IMA said its Sectors Committee is continuing a review of the Absolute Return sector and is likely to announce a decision in Q2.