The buy-side has been slow to switch from LIBOR-linked benchmarks on fund products, according to Investment Week, citing the Investment Association’s (IA) late last year survey that found 90% of participating managers use LIBOR as a benchmark for at least one fund. Of the IA's universe of funds,106 use a LIBOR-linked benchmark and just three – all Royal London products – use SONIA, according to FE data. Managers continue to launch LIBOR-linked funds, as recently as July, Pictet Asset Management launched its TR-Sirius fund with a LIBOR-linked hurdle rate. Church House Investment Management, which was reportedly making good progress selling all LIBOR-linked securities it invests in February, still uses LIBOR as the benchmark for its Tenax Absolute Return Strategies fund. The firm is contemplating applying a spread when making the switch and said it is in no rush given the regulatory and cost implications.
The buy-side has been slow to switch from LIBOR-linked benchmarks on fund products, according to Investment Week, citing the Investment Association’s (IA) February survey that found 90% of participating managers use LIBOR as a benchmark for at least one fund. Of the IA's universe of funds,106 use a LIBOR-linked benchmark and just three – all Royal London products – use SONIA, according to FE data. Managers continue to launch LIBOR-linked funds, as recently as July, Pictet Asset Management launched its TR-Sirius fund with a LIBOR-linked hurdle rate. Church House Investment Management, which was reportedly making good progress selling all LIBOR-linked securities it invests in late last year, still uses LIBOR as the benchmark for its Tenax Absolute Return Strategies fund. The firm is contemplating applying a spread when making the switch and said it is in no rush given the regulatory and cost implications.