The Investment Association (IA), the trade body for the funds industry in the UK, has given the green light for exchange-traded funds (ETFs) to join its sectors.
Joining the 3500 funds already available, ETFs will be placed within the association’s existing 37 fund sectors making them available for comparison against open-ended funds to savers and their advisers from the first quarter of next year onwards.
Over 200 ETFs are eligible to apply. The IA is currently inviting formal applications from ETF providers for their funds to be classified into the sectors.
Only ETFs that are UK-domiciled or are EU Ucits with UK tax reporting fund status will be included.
“We want to ensure that the IA sectors reflect the full range of products the asset management industry has to offer savers around the world,” said Galina Dimitrova, director of investment and capital markets at the association.
“ETFs are a growing part of this market and their inclusion in the sectors will enable consumers to compare across a wider variety of products”.
The move has been welcomed within the industry.
“Adding ETFs to broader investment sectors is an encouraging move from the IA that recognises how ETFs are becoming the product of choice for institutional and retail investors,” said Hector McNeill, co-founder of London-based investment platform HANetf.
BMO Global Asset Management’s ETF sales director, Christine Cantrell, hailed the decision as a “tick in the box” to ensure ETFs are “equally considered against open ended funds by all users of IA data”.
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