The launch of a consultation by the UK's Investment Association, on the inclusion of exchange traded funds (ETFs) in its' sectors, has brought mixed reaction from industry commentators.
Hector McNeil, co-CEO of ETF company HANetf, said that the consultation from the IA "shows a great deal of foresight" and welcomed the move.
"The fact is most investors have a variety of both active and passive strategies in their portfolios, including ETFs, and by including them in comparison tables it will enable investors to gain a better understanding of how their portfolios are performing."
Ryan Hughes, head of active portfolios at UK investment and savings specialists AJ Bell was not as supportive.
"ETFs are an investment structure, they are not a way of investing and therefore if you're adding ETFs why are you not adding investment trusts?," he said. "If what you're doing is saying let's have one sector for all funds, then it should include ETFs, funds and investment trusts, and surely that's what they are saying here.
Confusion
"If the IA are doing this for the sake of adding a load of passive funds to sectors then that just adds more confusion for investors."
"The inclusion of passive funds will mean that where you have got lots of passive funds in a sector they will occupy the bottom of the second quartile and the top of the third quartile, and active funds will sit above and below that - and that feels like a move that will create confusion for investors."
McNeil countered by pointing that improving transparency can "surely only be a good thing for end investors, and we hope the scope of ETFs included can also be widened over time."
