The paper explains how in the AIC’s view investment companies could be part of the solution to creating a more balanced financial system, whilst at the same time stimulating growth.
It was launched at its annual UK Conference for directors in London today.
The AIC argues that Europe’s fund market is currently imbalanced as it is dominated by open-ended funds, and a diversity in fund structures would yield benefits which would help realise the objectives of the EU’s capital markets union.
The trade body said a ‘balanced funds market’ should make a broad range of fund types available to investors, and be underpinned by a regulatory regime that does not “unfairly discriminate in favour of one fund structure over another.”
The upsides of such a situation in the AIC’s view would be more direct investment in business, better investor returns, greater focus on national markets, emergence of new financial centres and reduced exposure to systemic risks.
“Capital markets union provides a chance to position investment companies as the perfect vehicle to mobilise retail and institutional capital and channel investment into areas of the economy, such as infrastructure and small businesses, which are better served by a closed-ended structure.” Said AIC chief executive Ian Sayers.
“The EU funds market is currently dominated by UCITs and other open-ended funds which are better suited to investing in traded shares. Closed-ended funds, such as investment companies, are underrepresented, even though they have demonstrated their ability to outperform other types of collective investment and can help investors create a more balanced portfolio.”
The paper can be viewed here