SLI Higher Income scraps IMA benchmark to reduce risk

Standard Life Investments has changed the benchmark on its £595m Higher Income fund to reduce its risk profile.

The fund has scrapped the IMA £ High Yield index and replaced it with the Merrill Lynch Euro/GBP Fixed and Floating Non Financial High Yield 3% Constrained index. SLI says it has switched benchmarks to reduce risk in the fund without needing to overhaul the group's investment approach. In a note to clients it warns the High Yield sector "includes some funds which take more aggressive capital appreciation-oriented approaches and have higher risk tolerances than the Higher Income fund." It says this forced manager Arthur Milson to take on more risk than he wished. The group is not...