Schroders would benefit in IMA sector benchmark plan
Sector revamp options throw up new winners with offshore bond giant topping potential benchmark-based sector.
Schroders’ $1bn (£647m) ISF Asian Bond Absolute Return fund stands to benefit if IMA members opt to split the Absolute Return sector by performance benchmarks.
The Luxembourg-domiciled Sicav, run by Rajeev De Mello, gained 38.9 per cent over five years to May 31, according to Morningstar, the best return of the 13 funds in the sector that use cash-like benchmarks and have a five-year track record. Of those funds, only two have posted a positive return in each of the last five 12-month periods to May 31.
These are Insight Investment’s £347.8m Absolute Insight Currency fund and £719.8m Absolute Insight UK Equity Market Neutral fund.
Currently, roughly 42 of the Absolute Return sector’s 78 funds would qualify for entry into a sub-sector for funds using Libor or similar interest or inflation rate measures as their benchmarks.
Elsewhere, if the IMA chooses to split the sector by strategy, 29 funds investing in equities and bonds would qualify for a long/short sector. The IMA has admitted this is currently the only sector that would be formed under this option.
Of those 29 funds, only two have a five-year track record.