Aviva Investors has opted to pull its absolute return fund out of the Investment Management Association's (IMA) Absolute Return sector, after the category was renamed earlier this year.
After a lengthy review, the IMA renamed and redefined the Absolute Return sector as Targeted Absolute Return earlier this year, amid criticisms that many funds did not achieve a positive return and could therefore be confusing consumers.
Under the new definitions all funds in the sector must, at minimum, target positive returns in any market conditions.
The new rules were introduced in early 2013, but having had time to adapt to the changes, Aviva Investors has now become one of the first funds to exit the sector.
It has moved its £76m UK Absolute Return fund into the IMA Specialist sector, rather than make changes to the portfolio to ensure it meets the new Targeted Absolute Return guidelines.
The fund, headed up by Trevor Green, has delivered a return of 8.7% over the past year to May 24, according to Morningstar, ahead of the average return of 7.6%.
Sales director for UK financial institutions Jeremy Leadsom said: "This move was influenced by the IMA's review into the Absolute Return sector.
"Due to the fund's long/short strategy we did not feel it was appropriate to go into the UK All Companies sector alongside traditional long only-funds and therefore after a discussion with the IMA it was agreed Specialist was the best option. We are currently considering where the fund is best-placed going forward."
First established in 2008, the Absolute Return sector has come in for criticism in recent years owing to the disparate nature of the sector and many funds' inability to produce positive performance in all market conditions.
The FSA's 2012 Retail Conduct Risk Outlook also raised concerns over Absolute Return funds, saying that the names and investment objectives could imply they would produce a guaranteed positive return.
Despite having critics, net sales into the products have remained positive, topping the IMA's monthly sales charts in March after posting £334m of net sales.
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