AIC overhauls investment company sectors

Wednesday, 08 May 2019 11:33

The Association of Investment Companies (AIC) has revamped its investment company sectors following an industry-wide consultation.

Its new list of sectors and constituents comprises 13 new sectors, 15 renamed sectors and 31 sectors which are unchanged.

The sector reorganisation takes effect from 28 May.

The changes follow a year-long review of investment company sectors which was overseen by the AIC’s independent statistics committee of brokers, research analysts and data providers.

The AIC conducted the review in consultation with its members to ensure its investment company sectors were as clear and helpful as possible for investors.

Several of the new sectors reflect the greater numbers of investment companies investing in alternative assets.

The amount of money invested by investment companies in alternative assets has grown by 92% over the past five years, rising from £39.5bn in 2014 to £75.9bn in 2019.

For example, Sector Specialist: Debt has been separated into three new sectors, Debt – Direct Lending, Debt – Loans & Bonds and Debt – Structured Finance.

Similarly, companies in the Property Direct – UK and Property Specialist sectors have been reclassified as Property – UK Commercial, Property – UK Healthcare, Property – UK Residential or Property – Debt.

Ian Sayers, chief executive of the AIC, said: “We undertook this review to ensure that investment company sectors accurately reflect the shape of the industry today.

“Recent years have seen significant growth in investment companies investing in alternative assets, such as property, debt and infrastructure and the emergence of new asset classes such as leasing and royalties.

“Our new sectors allow investors to find and compare companies with similar characteristics easily. I’m confident the new sectors will play a useful role in helping inform investors’ decisions.”

New sectors

New sector	Sector description
Asia Pacific	Invests in the shares of larger quoted Asia Pacific companies.
Asia Pacific Income	Invests in the shares of larger quoted Asia Pacific companies, or high yielding securities, for a high income.
Asia Pacific Smaller Companies	Invests in the shares of smaller quoted Asia Pacific companies.
Debt – Direct Lending	Invests in direct lending.
Debt – Loans & Bonds	Invests in general loans and bonds.
Debt – Structured Finance	Invests in structured finance.
Growth Capital	Invests in unquoted shares. Generally takes non-controlling stakes in early to maturing companies.
Property – Debt	Invests in property debt.
Property – UK Commercial	Invests in UK commercial property.
Property – UK Healthcare	Invests in UK healthcare property.
Property – UK Residential	Invests in UK residential property.
Royalties	Invests in royalties.
Technology & Media	Invests in technology and media.

Renamed sectors

New sector	Old sector
Biotechnology & Healthcare	Sector Specialist: Biotechnology & Healthcare
Commodities & Natural Resources	Sector Specialist: Commodities & Natural Resources
Country Specialist: Asia Pacific ex Japan	Country Specialists: Asia Pacific
Country Specialist: Europe ex UK	Country Specialists: Europe
Environmental	Sector Specialist: Environmental
Financials	Sector Specialist: Financials
Forestry & Timber	Sector Specialist: Forestry & Timber
Infrastructure	Sector Specialist: Infrastructure
Insurance & Reinsurance Strategies	Sector Specialist: Insurance & Reinsurance Strategies
Leasing	Sector Specialist: Leasing
Liquidity Funds	Sector Specialist: Liquidity Funds
Property – Europe	Property Direct – Europe
Property – Rest of World	Property Direct – Asia Pacific
Renewable Energy Infrastructure	Sector Specialist: Infrastructure – Renewable Energy
Utilities	Sector Specialist: Utilities

Unchanged sectors

Country Specialist: Latin America	Private Equity
Europe	Property Securities
European Emerging Markets	UK All Companies
European Smaller Companies	UK Equity & Bond Income
Flexible Investment	UK Equity Income
Global	UK Smaller Companies
Global Emerging Markets	VCT AIM Quoted
Global Equity Income	VCT Generalist
Global High Income	VCT Generalist Pre Qualifying
Global Smaller Companies	VCT Specialist: Environmental
Hedge Funds	VCT Specialist: Healthcare & Biotechnology
Japan	VCT Specialist: Healthcare & Biotechnology Pre Qualifying
Japanese Smaller Companies	VCT Specialist: Infrastructure
Latin America	VCT Specialist: Media, Leisure & Events
North America	VCT Specialist: Technology
North American Smaller Companies