Investment Association consultation on inclusion of ETFs into IA sectors – AJ Bell comment

Ryan Hughes
30 November 2018

Commenting on the Investment Association’s consultation on the inclusion of ETFs into sectors, Ryan Hughes, head of active portfolios at AJ Bell, said:

“ETFs are an investment structure, they are not a way of investing and therefore if you’re adding ETFs why are you not adding investment trusts? If what you’re doing is saying let’s have one sector for all funds, then it should include ETFs, funds and investment trusts, and surely that’s what they are saying here. If the IA are doing this for the sake of adding a load of passive funds to sectors then that just adds more confusion for investors.

“The inclusion of passive funds will mean that where you have got lots of passive funds in a sector they will occupy the bottom of the second quartile and the top of the third quartile, and active funds will sit above and below that – and that feels like a move that will create confusion for investors.”

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