Confusion over funds' aims mars sector as higher equity weightings hurt returns

The IMA is consulting on scrapping current labels for the Managed sectors in favour of more simplified A, B, C, D categorisation.

Sitting between Active Managed and Cautious Managed, investors may assume they are getting a fairly even split between equities and bonds with the Balanced Managed sector, but this is usually not the case. Funds in the sector can invest between 40% and 85% of their portfolios in equities meaning, firstly, some offerings can have a higher risk profile than investors might expect and, secondly, asset and regional allocation can vary widely. There are 109 funds within the Balanced Managed sector, including multi-manager, fund of fund, and single manager structures. Lack of clarity M...