the ratings agency is to merge onshore and offshore funds, judging both on a bid to bid basis
Standard & Poor's is to combine onshore and offshore FSA recognised funds in single peer groups. Under these new classifications, fund performance will be judged on a bid-to-bid basis, rather than offer to bid as is the case with IMA sectors.
This is to allow offshore funds, traditionally looked at on a bid-to-bid basis, to be compared to their onshore counterparts. However, the funds in S&P's Global Investment Fund sectors will have performance presented in sterling terms. Users of S&P will continue to be able to access IMA categories via the information provider's systems.
S&P stressed that how statistics are displayed in trade publications will be up to the individual paper or magazine.
One result of the changes is that the S&P star ratings system will now award stars according to how a fund has done in its S&P rather than its IMA sector.
Dorian Carrell, head of statistics at the IMA, said he accepts IMA categories are not the only ones available to investors and in an ideal world investors should have a wide degree of choice available to them.
The IMA has recently implemented a policing policy to ensure that all funds in its peer groups are complying with the sector rules.
Carrell added: 'The choice is with the investor. It is a consumer protection issue and we are happy as long as the investor can understand the difference in terms of currencies and taxation in terms of offshore funds.
'Our sectors are designed to cope with authorised UK funds but that may change in the future if there was pressure from fund management groups and IFAs but there are no plans at present.' Any move by the IMA to include offshore funds in its own sectors would bring its own issues, not least whether it should be showing the performance figures of non-member groups, the cost implications of doing so, and whether it would be possible to police non-member funds in IMA sectors.
From 7 August the revamped fund categorisation from S&P will be available via www.funds-sp.com.
S&P's move to a less UK-centric means of looking at funds comes at the same time as Fefsi, the European trade body for investment funds, is looking to bring in a single pan-European investment fund classification scheme.
From this autumn, bond funds will be split into government, corporate and high yield categories.
Susan Bell, spokesperson for Schroders, said the scheme was at an early stage and it was not clear just how many fund categories would be developed.
She added the changes were unlikely to impact on the IMA structure because Fefsi is mainly concerned with Luxembourg-domiciled funds that are sold to pan-European investors.
Fefsi has been acting in conjunction with the European Fund Categorisation Forum to create the sectors. This later body is made up of fund management groups and information providers. It includes S&P as well as Lipper, Threadneedle and Schroders.
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