The Association of Investment Companies (AIC) has revamped its investment company sectors in a move set to better compare “apples with apples” with debt and property among the asset classes seeing the biggest shake up.
In total, 13 sectors have been added to the existing 46 sectors of which 15 have been renamed. Additions include Asia Pacific Income, Royalties, and Debt – Structured Finance.
Willis Owen head of personal investing Adrian Lowcock said the AIC sectors tend to be more granular than the Investment Association. Lowcock said the breakdown of specialist funds into separate categories will help investors “compare apples with apples”.
The AIC has issued sector descriptions comparing its sectors with comparable sectors in the IA universe.
“While it is always a concern that too many categories could just confuse investors, I think the AIC have done a good job of making each category as self explanatory as possible,” Lowcock said.
Alternative assets double
The rise in alternatives held in investment trusts was a big driver in the sector shake-up, the AIC said in a press release. Assets in such funds has grown 92% over five years from £39.5bn in 2014 to £75.9bn in 2019.
The former debt sector has now been divided into direct lending, the best installment loans and bonds and structured finance. The UK and specialist property sectors have been divided into UK commercial, UK healthcare, UK residential and debt sectors.
Lowcock said the changes made sense and look at fundamental differences in the characteristics and risks of the various types of investments.
The changes follow a year-long consultation by the AIC independent statistics committee, which is made up of brokers, research analysts and data providers.
AIC chief executive Ian Sayers (pictured) said the changes better reflect the current shape of the industry.
Sayers said: “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.”
New AIC 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 AIC 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 |
