IMA reviews currency management in fixed income funds

The IMA has been questioning fund groups over their exposure to currencies in their fixed income funds, with the view to tightening sector definitions.

Kames Capital's Stephen Snowden (pictured) said the trade body has been talking to fund groups about their exposure to currency markets, after learning some fund managers in the Sterling Corporate Bond sector are using currency bets as a dominant part of their portfolios. Under the IMA guidelines the sector definition says funds are required to invest at least 80% of their assets in sterling denominated assets (or hedge 80% of the portfolio back into sterling) with a maximum of 20% of portfolios exposed to bonds denominated in overseas currencies. However, Snowden claimed a number of ...