The Investment Association (IA) has launched a consultation into the future of its Global Bonds sector.The IA’s 37 sectors enable savers to easily navigate the open-ended fund market by dividing them into groups of similar funds. The consultation proposes dividing the 193-strong Global Bonds sector into ten new sectors so savers and their advisers can better compare global bond funds based on the following criteria:
• Type of bond eg government bond, corporate bond.
• Credit type eg investment grade, high yield, mixed.
• Currency focus eg USD, Euro or multi-currency.
The consultation forms part of the IA’s wider work to accommodate exchange-traded funds (ETFs) into its sectors which were given the green light to join last year. Given the high number of ETFs looking to join the Global Bonds sector, which would have seen it increase by 50 per cent, the IA has instead proposed the creation of ten new, more targeted sectors.
Jonathan Lipkin, Director for Policy, Strategy & Research at the Investment Association, says: “We are continually monitoring the fund market to ensure that all of the IA sectors reflect the wide range of products the investment management industry has to offer UK savers. The division of the Global Bonds sector will better enable the inclusion of ETFs and make it easier for savers to make like-for-like comparisons.”
The consultation will close on 10 October 2020. Responses are welcomed from all stakeholders interested in the distribution of funds in the UK, and in particular consumer representatives, distributors, advisers and fund selectors are invited to engage in this process alongside IA member firms.