What are IMA sectors?
There is a huge variety of different funds on sale in the UK to choose from. The IMA’s sectors provide a way of dividing around 2,500 of these funds into broad groups. Investors and their advisers can then compare funds in one or more sectors before looking in detail at individual funds and making their investment decisions.
Looking at sectors will not inform advisers and investors about the relative risk of funds. The literature of any fund should always be read. What is suitable or even best for any person depends on personal circumstances and not merely the sector classification.
IMA sectors are run by IMA staff and are overseen by the Sectors Committee. Fund providers choose the sector into which they would like their fund classified and submit their request to the IMA who reviews their classification. On a day-to-day basis IMA staff deal with queries, changes, decisions about track record and elections to join sectors.
Funds are also checked monthly by an independent monitoring company to ensure that they comply with the sector definition. IMA takes action against funds that do not comply with the definition to support the integrity of the sectors.
The Sectors Committee undertakes regular reviews of the IMA sectors. It is currently undertaking a comprehensive review of the Absolute Return sector.
IMA & ABI Harmonise Managed/Mixed Investment Sectors
This paper sets out the conclusions and decisions made by the two organisations to achieve harmonisation.
How sectors are organised
|The IMA’s sectors are organised within an overall classification scheme.|
Funds are broadly split between those that aim to produce income and those that aim for capital growth. These are further classified based on the type of asset, region or industry sector in which they invest. A few sectors are focused on capital protection, such as money market funds, or are in the specialist category. Some choose to remain unclassified.
IMA sectors each have a clear definition. This sets out the criteria that funds must follow if they elect to belong to that sector. Most sectors are organised around the principal asset types in which the fund should invest.
For example, the UK All Companies sector, comprises “Funds which invest at least 80% of their assets in UK equities which have a primary objective of achieving capital growth.”
Within any IMA sector the funds may offer a considerable variety of specific asset mixes, strategies and risk profiles.
IMA accepts offshore funds for classification to the sectors alongside UK funds. Offshore funds are non-UK domiciled funds with a UCITS passport - see here for more information. We provide guidance on the submission of offshore funds.