European Fund Classification
The
European Fund Classification (EFC) is a new pan-European classification system of investment funds which has been developed by the European Fund Categorization Forum (EFCF) – a working group of
the European Fund and Asset Management Association (EFAMA). Leading cross-border
fund management companies and information providers are members of the EFCF.
The current classification reflects a total universe of 14559 share classes and 5822 funds supplied by 64 fund groups. The latest available classifications have been made on the basis of June 2011 holdings and will initially be followed by quarterly updates, the next being made on the basis of September 2011 holdings.
| Distribution on fund universes - pr. 30/06/2011 | ||||
| Fund Universe | Number Of Funds | Number Of Classes | ||
| Bond | 1450 | 25% | 3550 | 24% |
| Money Market (*) | - | - | - | - |
| Equity | 3652 | 63% | 9275 | 64% |
| Mixed | 350 | 6% | 874 | 6% |
| Other | 370 | 6% | 860 | 6% |
| Total | 5822 | 100% | 14559 | 100% |
* The classification of Money Market Funds is under progress to ensure that all funds classified within the EFC comply with the ESMA definition of MMFs.
In the downloadable classification sheet, funds are displayed with fund group, ISIN code, name, classification result and a classification code used to communicate the classification. Funds and classifications can also be viewed in the search engine under the search classifications menu.
The vision of the EFCF is to create a true pan-European classification of investment funds which is supported and recognized by the fund groups as well as data vendors and national associations. The classification should be beneficial for all parties as it will ensure
- Transparent comparisons of cross-border funds
- Less controversial peer group analysis
- A common language for fund classifications
- High threshold levels that secure investor protection
- Greater standardization in the production of funds
The classification is performed by FundConnect, who was selected as Classification Administrator in a joint venture with Finesti, a subsidiary of the Luxembourg Stock Exchange. The main responsibility of the Classification Administrator is to collate and review the portfolio holdings of every fund management company that is interested in adopting the EFC and to monitor, (initially on a quarterly basis) adherence to the classification criteria as defined by the appropriate sector definitions. The Classification Administrator performs the duties of the classification on a non-monetary basis. The classification results will be freely available on the website of FundConnect and EFAMA and it is possible for data vendors or other interested parties to receive the results of the EFC in bespoke feeds.
More information about the EFC is available in the official EFC brochure, decision trees and classification schematics which can be downloaded in the EFC resources menu.