Free to use, industry-developed project succeeds at creating representative fund peer groups with full transparency and broad market coverage
The European Fund and Asset Management Association (EFAMA) has released today a new issue of its Market Insights series titled “The European Fund Classification (EFC) - A robust standard suitable for asset managers and policymakers”. This publication provides a comprehensive evaluation of the EFC and its value as a reliable, industry-led standard for classifying investment funds.
The EFC is the only fund classification system owned and governed entirely by the asset management industry. It classifies funds based on actual portfolio holdings rather than marketing labels, it’s free of charge and designed to ensure objectivity, transparency and comparability across investment products.
This new report puts the EFC classification to the test by assessing whether it groups funds into representative peer groups that exhibit consistent performance characteristics and align with empirical expectations in financial markets.
Key findings:
The EFC is currently the most inclusive classification system for UCITS, including over 43,000 funds or 200,000 share classes based on transparent portfolio-driven criteria.
The EFC is highly adaptable for industry and regulatory use as it integrates a wide set of data attributes.
It delivers coherent and representative fund peer groups, with performance distributions within EFC categories consistently narrower than those of the broader fund universe.
It successfully captures key empirical patterns in fund performance and overall market dynamics.
Vera Jotanovic, Senior Economist at EFAMA, commented: “Our analysis confirms that the EFC is a reliable and consistent classification framework. By effectively grouping funds with similar characteristics and preserving widely observed market patterns, the EFC empowers investors, asset managers and policymakers alike with greater transparency and analytical precision. This kind of clarity is essential in today’s fast-evolving financial landscape.”
Tanguy van de Werve, Director General at EFAMA, added: “The European Fund Classification is essential for ensuring transparency in the market. It supports evidence-based policymaking and allows for informed and effective supervision. We encourage broader adoption and recognition of the EFC framework across Europe to improve consistency in fund reporting and product assessment.”
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Learn more about the EFC here.
For further information, please contact:
Hayley McEwen
Head of communications and member development
About the Market Insights
EFAMA’s Market Insights series analyses recent industry trends and developments based on the latest available data and presents our findings in the context of current policy perspectives. We publish numerous concise reports each year covering diverse topics such as ESG fund markets, competitiveness, costs and performance, ETFs, alternative investments, retail investing, and more.
