IA updates property and healthcare sectors definitions

04 February 2026, London: The Investment Association (IA) has today announced updates to the IA’s Property and Healthcare sectors to reflect evolving approaches to investing. As part of the reviews, the definitions of these sectors were examined to determine whether they align with current market practice and to best help savers and their advisers to navigate the large universe of funds in the UK. 

The property sectors review looked at recategorising the UK Direct Property and Property Other sectors due to shifting market dynamics. Following a public consultation, it was agreed that two new sectors will be created: a Direct and Hybrid Property sector, and a Listed Property sector. This change will give investors a clearer way to both find funds with a meaningful exposure to physical property and those investing in listed property. 

A second review considered whether the IA should allow biotechnology funds to be classified alongside funds in the Healthcare sector. Following a consultation, it was agreed that biotechnology funds should be eligible for inclusion in the Healthcare sector rather than remaining in the Specialist sector or outside the sectors scheme, where they are less visible to investors. To reflect the change, the sector will be named the Healthcare and Biotechnology sector, giving investors improved visibility over an important part of the healthcare landscape, highlighted by the Life Sciences place in the UK government’s industrial strategy.   

Changes to all Property and Healthcare sectors will come into force on 1 June 2026. 

Miranda Seath, Director of Market Insight & Fund Sectors at the Investment Association, said: “We continually assess our fund sectors to ensure that they are aligned with evolving approaches to investing. It is important to acknowledge that market practice has changed since the IA's Property and Healthcare sectors were originally created. The new categorisations and inclusions better reflect the way that fund managers define funds in these sectors, assisting investors and their advisers in finding like-for-like funds when taking investment decisions.”  

ENDS

---

Notes to editors  

Direct and Hybrid Property sector definition (from 01.06.26)  

Funds that invest at least 70% of their assets in direct property or in a mixture of direct property and listed property securities. Funds are expected to invest an average of at least 35% of their assets directly in property over 5-year rolling periods. Funds that fall below 20% in direct property for any continuous 3-month period may be removed from the sector. 

Listed Property sector definition (from 01.06.26)  

Funds that invest at least 80% of their assets in listed property securities. Some funds in the sector will have a specific regional focus (e.g. European Listed Property). These funds may exhibit different characteristics from globally diversified funds and investors should take extra care when making comparisons. 

Healthcare and Biotechnology sector definition (from 01.06.26) 

Funds that invest at least 80% of their assets in equities of healthcare companies and related sectors including industries such as pharmaceuticals, healthcare equipment and services and biotechnology and life sciences in any country.  

Some funds may have a thematic approach (e.g. healthcare innovation). Some funds may have a specific industry focus on biotechnology or life sciences. These funds may exhibit different characteristics from diversified healthcare funds and investors should take extra care when making comparisons. 

Rationale for the changes to the Direct and Hybrid Property sector: 

The changes give investors a clearer way to find funds with meaningful exposure to physical property, including both traditional direct property funds and those that have moved to a hybrid model holding a mix of direct and listed property. In setting a minimum allocation to direct property, the Sectors Committee sought to distinguish this sector from the newly created Listed Property sector and ensure that investors can expect funds to hold a material level of direct property. The definition aims to balance setting a robust threshold with the recognition that managers holding physical property may see percentage allocations fluctuate. The 5-year rolling period and 35% threshold affords some flexibility for managers through the monitoring approach as set out in the sector definition. 

Rationale for the changes to the Listed Property sector: 

Defining the sector helps to keep all listed property strategies together in a single, coherent peer group, regardless of geographical focus. With too few regional or single‑country funds to justify separate sectors, this approach avoids pushing these funds into the Specialist sector. Investors can easily distinguish between global and regional approaches through fund names and documentation.  

Rationale for the changes to the Healthcare and Biotechnology sector: 

The new definition gives investors better visibility of an important and innovative part of the healthcare market. Many funds in the Healthcare sector already invest in biotechnology companies as part of a diversified portfolio, meaning the sector inherently contains some biotechnology exposure. Bringing these funds into the Healthcare sector will improve their visibility and ensure consistent treatment with the definition of the other industry sectors.