The Investment Management Association (IMA) is to create an emerging market debt (EMD) sector from 31 December 2013, following a review of its fixed income sectors.
Funds will fall into the IMA Global Emerging Markets Bond sector if they invest at least 80% of their assets in emerging market bonds as defined by a recognised global emerging markets bond index.
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The IMA, led by Daniel Godfrey has insisted funds must be diversified geographically to qualify for the new sector.
The sterling high yield bond sector will require at least 80% investment in sterling high yield bonds rated BBB- or below, an increase from 50% under the previous regime.
IMA has also amended that hybrid securities such as convertibles, preference shares and permanent interest bearing shares will be excluded from Sterling Strategic Bond’s 80% allocation to fixed income securities.
The global bonds sector has been re-defined with the creation of the new sector, and will now exclude those funds that have over 80% of assets in emerging markets.
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By GlobalDataFirms with funds already in these sectors will have until 31 March 2014 to comply with the rule changes.
