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IA creates eight new sectors to cater for influx of ETFs


The newly created sectors are split into three – Regional Equity, Industry and Alternative Investment

The newly created sectors are split into three – Regional Equity, Industry and Alternative Investment

The Investment Association (IA) is creating eight new sectors from its Global and Specialist sectors to reflect the evolving retail fund market.

With a combined total of nearly 800 funds, the Global and Specialist sectors are among the largest within the IA’s classification scheme. In April, more than 530 exchange traded funds were introduced to IA’s sectors, with the Global and Specialist sectors taking 71 and 79 of these products, respectively.

This is the second time this year that the IA has announced a sweeping change to its sectors. Last month the trade body announced it was splitting its Global Bond sector into 14 new segments to make comparisons simpler for investors.

The newly created sectors are split into three – Regional Equity, Industry and Alternative Investment.

ETF inclusion in IA sectors set for April 2021 as Global Bonds sectors splits

Within Regional Equity is Latin America, India/Indian Subcontinent, and Global Smaller Companies. The Industry sector is made up of Financials and Financial Innovation, and Healthcare, while Alternative Investment includes Infrastructure, Gold and Precious Metals, and Commodity/Natural Resources.

The IA said roughly 150 funds from the two existing sectors will be affected when the changes come into effect on 13 September 2021.

Miranda Seath, head of market insight at the IA, said: “As the retail funds market in the UK evolves, so too do our sectors. The inclusion of ETFs in our sectors has been a good opportunity to review the future of two of our largest sectors, IA Global and IA Specialist.

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IA proposes dividing Global Bonds sector into ten targeted sectors

“The eight new sectors have the ambition to support the long-term financial aims of the investors they serve, and each includes a meaningful number of funds with similar investment objectives – helping savers and their advisers to better navigate and compare the funds on offer in the UK.” 



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