ETFs to join Investment Association’s sectors in April 2021

Dec 18th, 2020 | By | Category: ETF and Index News

Eligible exchange-traded funds will be included in the Investment Association’s (IA) sectors from 19 April 2021.

ETFs to join Investment Association’s sectors in April 2021

Jonathan Lipkin, Director for Policy, Strategy and Research, The Investment Association.

Their inclusion in the UK trade body’s sectors will coincide with the division of the IA Global Bonds sector, which will be split into 14 new sectors.

The creation of the new bond sectors is part of the IA’s review of its sectors to ensure they remain relevant and fit for purpose for investors, and to accommodate the over 500 ETFs set to join the sectors.

The IA consulted on splitting the Global Bonds sector based on type of bond, credit type and currency focus earlier this year, following confirmation in May 2019 that ETFs would be joining the IA sectors.

The high level of interest from ETFs looking to join the sectors meant that if unchanged, the number of funds in the Global Bonds sector would increase by more than 50%.

ETFs joining the IA sectors have nominated the most appropriate sector for each fund. Once completed, the IA’s sectors will contain over 4000 funds, divided across 52 sectors.

Only physical replication UCITS ETFs domiciled in the UK or the EU with HMRC reporting fund status are eligible for inclusion

Jonathan Lipkin, Director for Policy, Strategy and Research at the Investment Association, said: “We continually monitor the fund market to ensure all IA sectors reflect the wide range of products the investment management industry has to offer UK savers. Including ETFs within the IA sectors will help investors more easily find and compare the full range of investment funds available to them.

“As part of the process to include ETFs, we are also reviewing the overall structure of the IA sectors. The division of the Global Bonds sector from April next year will ensure savers are better able to make like-for-like comparisons when choosing their investments.”

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