ETFs & IA Sectors

From April 19 2021, investors will be able to compare over 530 exchange traded funds (ETFs) from within the Investment Association’s  sectors. To find more information on how the entry of ETFs will affect the IA sectors, please read our FAQs.


The addition of over 530 ETFs will increase the number of funds classified in the 52 sectors to over 4,100 funds. You can find more information on the ETFs in our current list of funds.


The inclusion of ETFs in the IA sectors is also leading to wider changes.  The Global Bonds sector, which would have increased in size by 50% (129 ETFs), will be replaced by 14 new bond sectors that have been created based on the following criteria: type of bond, credit type and currency focus.

 

There are over 50 IA sectors. These are there to help anyone navigate around the large universe of funds in the UK and include some offshore (EU) funds.

The sectors divide up the funds into smaller groups, to allow you to make like-for-like comparisons between funds in one or more sectors, for instance to look at performance and fund charges.

 

IA sector definitions

Each sector has a clear definition setting out the criteria a fund must fulfil. We’ve organised most sectors based on the main asset types the fund invests in. Funds in any sector may offer a wide mix of asset, strategies and risk profiles. Look up individual sector definitions.

 

What sectors are there?

There are around 4,000 funds on sale in the UK that are classified to the IA sectors. Our sectors provide a way to divide these into broad groups, so investors and advisers can compare funds in one or more sectors before looking in detail at individual funds.

 

Managing the sectors

The IA’s sectors are overseen by our Sectors Committee. An independent monitoring company checks the funds monthly to ensure they comply with the sector definition. If they don’t, we can remove them. Find out more about how we manage sectors and our Sector Committee reviews.

 

How we organise sectors

Broadly, we split funds between ‘income’ and ‘capital growth’. We then classify these by asset type, region or industry sector they invest in. Some sectors focus on protecting capital or are in a Specialist category, while others are Unclassified. Some sectors group together funds with an outcome focus such as Targeted Absolute Return or the Volatility Managed sector. See more about sector classification.

 

Performance

A key way the industry, fund selectors and distributors use fund sectors is to compare performance. Please note, data vendors collect performance data to calculate sector averages. We think common comparisons are a good thing and support data vendors to identify a ‘primary’ share class in the post-RDR (retail distribution review) world. Find out more about fund sector performance.