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New fund category to list funds that do not disclose holdings

ClassificationA fund classification is to be implemented in Nordic countries, Switzerland and Germany with a view to making more cross-border funds in Europe easier to compare.

The ‘indicative classification’ (IC) will attempt to classify funds that have not disclosed their holdings.

IC will see a “major boost” to the number of classified funds and enable a more complete peer group for better comparison, said the European Fund and Asset Management Association (Efama).

The IC is intended to make the existing European Fund Classification (EFC) system stronger by adding funds for which a classification administrator does not obtain the portfolio holdings.

The IC will be carried out by providers interested in collecting relevant information and data from different sources with a view to determine which EFC category the funds belong.

EFC is a pan-European classification system that allows fund groups to have their funds classified for free and the classification results distributed to the market for no cost.

IC is launched by the European Fund Categorization Forum – an Efama group that includes national associations, data vendors and fund management firms.

Peter De Proft, director general of Efama, hopes the IC will “convince a greater number of fund managers to have their funds classified on the basis of their portfolio holdings”.

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