IMA consults members on fixed income sector overhaul

The IMA is consulting its members over changes to the fixed income sectors, including limiting exposure to asset backed securities and reviewing the classification of short-term bonds as cash.

The Investment Management Association said a number of funds in the £ Corporate Bond sector have significant exposure to asset backed securities (ABS) and would fail to meet the sector requirements if ABS were excluded from the core ‘corporate' exposure, which has an 80% limit. The European Fund Categories allow up to 20% in ABS or MBS within their classifications. A number of firms contacted by the IMA said they class ABS within their core holdings, although they differentiate between different types, including residential mortgage backed securities (RMBS) and regulated covered bonds...