The 17-page report, which may be viewed on EFAMA’s website, notes that the category of funds typically dubbed Newcits “are neither new products nor a new category of funds”, and, because they are “subject to and managed in compliance with the Ucits framework” they are just as robust as other UCITS products.
Adds the report: “The ‘Newcits’ label was coined by the media and should not be adopted by the industry or regulators. We do not believe that it is necessary or beneficial to have a specific label for these funds.”
Later, it adds: “The term ‘Newcits’ incorrectly indicates the creation of a new type of product or a legal sub-category that is clearly defined and quite different from other UCITS. This is not the case, and the term should be avoided.”
The London-based financial news organisation Citywire has frequently claimed credit for having coined the term Newcits to describe what it called "hedge fund style strategies available within the Ucits III framework".
Other conclusions of the EFAMA report:
• The universe and strategies of Ucits are continuing to evolve, “due to investor demand for risk reduction and return enhancement, which is a global trend”
• This evolution is encompassed by the Ucits regulatory framework, which is being further developed, especially under the Ucits IV framework that takes effect on 1 July
• "All Ucits and Ucits management companies are subject to the same detailed regulatory framework and must comply with it; the key issue is proper enforcement of the rules"
