The Investment Association (IA) has announced plans to launch a new volatility managed sector to deal with funds in the unclassified group that target volatility or risk outcome for investors.
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IA opted for the launch over a restructure of sectors on the expectation that the move will retain the scheme’s current clarity for consumers and their advisors.
The trade body further said that the new sector, expected to be launched in November, will have a high hurdle of transparency.
Funds in the sector will have to publicly reveal that they are managed to deliver a volatility or risk outcome as well as provide advisors and consumers information on how that volatility is measured.
The trade body is now calling on members to elect the funds that fit the new definition, following which the products will be reviewed by IA’s Sector Committee.
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By GlobalDataIA director of capital markets Galina Dimitrova said: "Changes to the distribution chain, new regulation and the introduction of the pension freedoms have seen an evolution in the products offered by the asset management industry.
"The IA sectors always look to evolve alongside the universe of investment funds available to investors, and the launch of the Volatility Managed sector is an important step to grouping more outcome focused funds together for the benefit of consumers and advisers when making investment decisions."
