Chatfeild-Roberts brands IMA Managed sectors 'rubbish'

Jupiter’s John Chatfeild-Roberts has called the latest Investment Manager Association (IMA) labels for its managed fund sectors ‘a load of rubbish’.

He said the IMA’s decision to drop the 'Cautious' and 'Balanced' labels was driven more by fear of independent financial advisers (IFAs) being sued rather than improving clarity for investors.

‘I don’t have a problem with the reasoning [of the rebranding]. But the names are a load of rubbish and driven by the fear of people being sued,’ said the Jupiter CIO (pictured) at a roundtable discussion hosted by Cofunds.

In November last year the IMA and Association of British Insurers (ABI) relabelled their managed fund sectors to provide a clear indication of the funds' exposure to shares.

Instead of the Cautious, Balanced and Active labels; the new sectors were renamed Mixed Investment 0-35% Shares, Mixed Investments 20-60% Shares, Mixed Investments 40-85% Shares, and Flexible Investment.

The panel also included Gary Potter, co-head of the multi-manager team at Thames River Capital, who agreed that the new names failed to better clients’ understanding of risk when investing in the IMA categories.

‘These names are even more confusing as you immediately have a grey area. For a start it supposes that shares are the only risky asset and that all non-equities are low risk,’ he said.

‘A fund could have 74% in US bonds while another has zero but they would be in the same category.  As an investor, you have to understand what you are buying,’ he added.

One of the funds co-run by Potter and Robert Burdett, the Thames River Cautious Managed, falls in the Mixed Investments 20-60% IMA sector. It has returned 25% over three years compared to the LCI Mixed Asset index’s 30.9% over the same period.

The panel, which included AXA fund manager Richard Marwood and Bill McQuaker, Henderson’s head of multi manager, were agreed that clients and multi managers should not rely on a risk categorisation system when allocating assets.