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ABI proposes new fund sector to help consumers

The ABI is proposing to introduce a new fund sector to help consumers easily find the right money market fund for them to invest in. ABI Fund Sectors categorise different types of investment fund, allowing consumers and financial advisers to compare funds with similar investment profiles against each other. While no fund is without risk the new sector will seek to help consumers identify funds that have a greater focus on capital stability.

The proposed new sector would exist in parallel with the existing money market sector, and would have stricter limits on the type of instruments funds can invest in and their maturity.

In order to seek views on its proposals the ABI has launched a consultation. The closing date for the consultation is Friday 8 May 2009 and will be reported on shortly afterwards.

Maggie Craig, the ABI's Director of Life and Savings, said:

"The introduction of a new sector is to help consumers find funds that offer greater stability. This is not about the introduction of new funds, but rather to bring-in clearer labelling of what already exists. The new sector will run in parallel to the existing money market sector.

"This initiative is in direct response to what consumers and advisers have been telling us they want. With volatility in the markets many people want to easily choose a stable way to invest their money."

Jeremy Thatcher, Chairman of the ABI's Investment Classification Committee, said:

"This consultation paper is only the first stage of our regular review cycle and, as usual, we will be looking at all the sectors in due course. During this wider review we will carefully look at all aspects of the sectors to ensure that the sectors continue to serve the needs of consumers and advisers.

"These reviews are essential as advisers trust the ABI Sectors and value their impartiality."

The ABI is consulting with a wide range of organisations, including, consumer groups and industry bodies. The consultation is available on the ABI website so that consumers can submit their views on the proposals directly.

Last updated 01/07/2016