The Investment Association has today given the go ahead for exchange traded funds (ETFs) to be included in the IA sectors from next year.

The IA, the fund managers’ trade association, says the move means that investors and financial advisers will be able to compare ETFs against the 3,500 funds already in the IA’s 37 fund sectors from Q1 of next year.

The ETFs will be placed within existing IA sectors which enable comparison between open ended funds by dividing them into groups of similar funds based on factors such as asset class, investment strategy and geographical region.

The IA estimates that over 200 ETFs will be eligible to apply and it is now inviting formal applications from ETF providers for their funds to be classified into the sectors.

Only physical ETFs that are either UK domiciled, or are EU UCITs with HMRC reporting fund status will be included.

Galina Dimitrova, director of investment and capital markets at the Investment Association said: “We want to ensure that the IA sectors reflect the full range of products the asset management industry has to offer savers around the world.

“ETFs are a growing part of this market and their inclusion in the sectors will enable consumers to compare across a wider variety of products.”

The IA has 250 members managing £7.7 trillion of assets.