Fund information provider Morningstar has dropped its use of ‘Absolute Return’ to classify UCITS funds available in Europe and Asia and replaced it with 18 new classifications re
Fund information provider Morningstar has dropped its use of ‘Absolute Return’ to classify UCITS funds available in Europe and Asia and replaced it with 18 new classifications reported Fundweb recently. A decision that has been widely applauded by fund advisers. The new classification system will categorise funds based on their underlying investment portfolio and risk exposures, in addition to region, asset class and specific strategies. Categories include: Currency, Diversified Arbitrage, Systematic Futures, Volatility, Global Macro etc. Morningstar’s director of European and Asian fund research, Christopher Traulsen (pictured), said that ‘Absolute Return’ as a fund category had become too associated with a “broader industry marketing term”. He said the new classification would give investors greater clarity on funds’ underlying strategies. “We believe the new alternative categories do a superior job of capturing the range of strategies used by the represented funds and we’re pleased to offer this further clarity to investors and fund providers.” Meera Patel, a senior analyst at Hargreaves Lansdown, told Fundweb that the new classification made sense even though there’ll be more sectors for advisers to deal with.
