Brussels, 16 October 2018 - For immediate release

EFAMA launches new Industry Initiative to Extend the European Fund Classification (EFC)

The European Fund Categorization Forum (EFCF) – a Task Force of the European Fund and Asset Management Association (EFAMA) – has launched an Indicative Classification (IC) to address the market need for a stronger coverage of the European Fund Classification (EFC).  The introduction of the IC sees a major boost to the number of funds classified, enabling more complete peer groups to create meaningful comparisons.

The EFC is a pan‐European classification system of investment funds, which has been developed by the EFCF to permit simple comparison of funds with comparable investment strategies.  The growth of cross-border fund distribution heightened the need for such a classification system to facilitate consistent peer group analysis across Europe and strengthen the further development of the single market for investment funds. 

The European Fund Classification combines many advantages:  

● It is built on well-defined criteria to define EFC categories and ensure transparency for investors and fund management companies. 

● It involves regular monitoring of holdings by a neutral classification administrator, FundConnect, to ensure that funds do not drift from their stated objectives. 

● It is industry-owned and managed without being influenced by any singular commercial interests.

● Fund groups can have their funds classified for free and the classification results are provided to the market free-of-charge.   

To further increase the number of funds classified according to the EFC, the EFCF has decided to provide IC for funds for which the 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, in close coordination with the EFCF, in which EFC category the funds belong, taking into account the thresholds set in the EFC categories.     

In the first stage of this new industry initiative, an indicative classification has been made for funds distributed in the Nordic countries, Switzerland and/or Germany.  The indicative classification for the Nordic funds has been carried out by the classification administrator, whereas the indicative classification for the funds distributed in Germany and Switzerland has been provided by Financial Express (FE).

Peter De Proft, Director General of EFAMA, notes: “The launch of an indicative classification is an important step to increase the visibility of the European Fund Classification and the coverage of the fund market, and to convince a greater number of fund managers to have their funds classified on the basis of their portfolio holdings".

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For media enquiries, please contact:
Peter De Proft, Director General
Bernard Delbecque, Senior Director for Economics and Research
Telephone: +32 (0) 2 513 39 69
E-mail: info@efama.org


Notes to editors:

About the European Fund and Asset Management Association (EFAMA):
EFAMA is the representative association for the European investment management industry, which represents 28 member associations and 62 corporate members. At end 2017, total net assets of European investment funds reached EUR 15.6 trillion.  Close to 32,000 of these funds were UCITS (Undertakings for Collective Investments in Transferable Securities) and close to 28,300 of these funds were AIFs (Alternative Investment Funds).  Including discretionary mandates, third-party regulated asset managers managed EUR 25 trillion in Europe at end 2017. For more information about EFAMA, please visit www.efama.org.

About the European Fund Classification:
More detail on the EFC can be found on the EFC webpage: http://www.efama.org/SitePages/EFCF.aspx

There are currently 3,938 funds (25,325 share classes) that are classified on the basis of their portfolio holdings.  With the introduction of the indicative classification for funds distributed in the Nordic countries, Germany and Switzerland, it is expected the EFC will cover 17,023 funds (73,775 share classes), with more than 500 fund groups being included in the classification.

The indicative classification for the Nordic funds has been provided by the EFCF classification administrator (www.fundconnect.com), whereas the indicative classification for the funds distributed in Germany and Switzerland has provided by FE (www.financialexpress.net) in close cooperation with FundConnect.

Fund groups interested in having their funds classified on the basis of their portfolio holdings should contact the EFC classification administrator at EFCF@Fundconnect.com.