Ucits III forces IMA to rethink classifications

The IMA is considering overhauling its sector classifications to account for greater use of synthetic investments since the arrival of Ucits III powers.

It says while sectors have traditionally been defined by a minimum exposure to an asset class, such classifications have become less relevant since the introduction of broader investment powers under Ucits III. These powers allow the fund manager to meet the definitions without holding physical assets or by using an overlay strategy. The issue has been compounded by the growing popularity of absolute return and multi-asset funds, which make more use of alternative assets such as hedge funds, private equity, commodities and structured products, the IMA says. The association is now surv...