Interactive Investor

Six new fund sectors launched to help retail investors

13th September 2021 12:04

Tom Bailey from interactive investor

The Investment Association said that the new sectors should help retail investors better identify funds as the variety of different funds evolves.

The Investment Association (IA), the investment fund trade body, has announced the launch of six new fund sectors.

The six sectors will be spun out from the Global and Specialist sectors. Currently, the two sectors are among the largest sectors. The Global sector currently has 471 funds and the Specialist sector 332.

The new sectors are as follows:

New country - regional equity sectors:

  • Latin America
  • India/Indian Subcontinent

Industry sectors:

  • Financials and Financial Innovation
  • Healthcare

Alternative investment approaches:

  • Infrastructure
  • Commodity/Natural Resources

The IA said that the new sectors should help retail investors better identify funds as the variety of different funds evolves.

For example, the creation of the healthcare and finance and financial innovation category are likely the result of the growth of thematic focused funds. It also reflects the wider number of funds covered in the IA following the recent inclusion of exchange-traded funds (ETFs) in the trade body’s sectors.

The new fund categories will see the number of sectors rise from 52 to 58, covering over 4,100 funds. The new sectors will take effect from today (Monday 13 September 2021).

Miranda Seath, head of market insight at the Investment Association, said: “Our data shows that UK investors have an increasingly global outlook, as the share of funds under management invested in overseas equities rises year-on-year. Whether investors are looking for opportunities in developing economies such as Latin America and India, or to take advantage of advances in industries such as healthcare, there is now a more diverse range of funds classified to the IA sectors than ever before, including the recent addition of ETFs.

“If clear fund groupings emerge from some of the largest IA sectors, carving out meaningful new sectors can help investors and their advisers to make like-for-like comparisons. The launch of these six sectors should help all investors to better understand the investment opportunities available to them.”

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