The European Fund and Asset Management Association (Efama) is hoping to unite fund distributors, data companies and national organisations in using a “true pan-European classification of investment funds” that will aid fund comparison.
The scheme divides 3,296 funds from 124 asset managers into six broad categories. There are equity, bond, multi-asset and money market funds, alongside “absolute return innovative strategies”, which seek positive returns in all market conditions, and “other” funds, which captures a number of alternative vehicles, for instance real estate funds. There are further subdivisions within the main categories.
The classification was devised by data provider FundConnect in a joint venture with Finesti, a subsidiary of the Luxembourg Stock Exchange. These firms are charged with reviewing the portfolio holdings of asset managers interested in adopting the classification scheme and monitoring, on a quarterly basis, adherence to the scheme.
More than half, 53%, of the products in the scheme are equity funds, 27% are bond funds, 9% are multi-asset and 7% are “other”. Money market and absolute return innovative strategies account for just 2% each of the funds.
The 3,296 funds in the scheme include 13,048 share classes. The most popular sub-category of funds is “equity global advanced markets”, which accounts for 9% of all share classes, followed by “bond emerging global”, which accounts for 3% and “multi-asset global advanced markets balanced”, with 1%.
Peter De Proft, director general of Efama, said the categories “provide the European fund industry with a tool to support the Ucits brand with a single standard of fund classification designed to give distributors and their clients the confidence that the fund they select are true to their label”.
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