Fund management trade body - the Investment Management Association (IMA) - has dropped Lipper as its data provider in favour of Morningstar.

Morningstar UK will take over sector monitoring for the trade body from October, following a tender process announced last year.

The data provider will monitor portfolio holdings of each fund in the IMA sectors to ensure funds meet sector parameters and are comparable with other funds in each sector.

The trade body will work alongside Morningstar and members to develop reporting and analysis for monitoring funds that use derivatives.

Jane Lowe, director of markets at the IMA, said, 'Our original motive for putting out a tender was to get new ideas.

'Morningstar impressed us with their innovative thinking, particularly in assessing those funds that use derivatives.'

Geoff Balzano, chief executive of Morningstar UK, said, 'By working with the IMA, we are helping to ensure that its sector classification system will evolve to capture and reflect the impact of these increasingly important securities.'

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