Keiron Root replies:
Jupiter Emerging European Opportunities is now classified by the IMA as a Specialist fund and  appears in that sector in our tables. Our tables follow the classifications set out by the Investment Management Association (IMA), the trade body for fund management groups.

The IMA sets the parameters for these sectors to try to ensure only similar funds are being compared with each other in each sector. While this is a relatively straightforward task where funds are concentrating on a specific market or sector, say, North American funds or those investing in UK Smaller Companies, it becomes more complex where other funds are concerned, particularly those with a specialist investment brief or a distinctive investment strategy.

In the case of Jupiter Emerging European Opportunities, this was originally classified in the Global Emerging Markets sector, on the entirely logical grounds that it invests in emerging markets, albeit specifically those of central and eastern Europe. Since, however, the bulk of the funds in that sector invest across a global spread of emerging markets, the Jupiter fund was likely to either dramatically outperform the sector as a whole, if Europe was doing well, or dramatically underperform if it was doing badly, simply by virtue of what was happening to its underlying markets, rather than anything the fund manager was doing.

So the IMA, in one of its periodic readjustments of its sectors earlier this year, decided to move the regional emerging markets funds out of the Global Emerging Markets sector and into Specialist. Other funds affected in this way include Allianz RCM BRIC Stars and Credit Suisse Euro Frontier.

This undoubtedly cleaned up the Global Emerging Markets sector, so that those funds remaining there have similar investment briefs – although, curiously, it still includes a F&C fund that excludes Asia Pacific markets. However, it has confirmed that status of the Specialist sector as something of a “dog’s breakfast”, where property funds sit alongside Latin American funds, global infrastructure funds with financial sector specialists and  European Emerging Markets portfolios next to Biotech funds, making performance comparisons within that sector, at least, somewhat meaningless.