The Association of British Insurers (ABI) plans to introduce a new fund sector to help consumers find the right money market fund for them to invest in.

ABI Fund Sectors will categorize different types of investment funds, allowing consumers and financial advisers to compare funds with similar investment profiles against each other.

The new sector will seek to help consumers identify funds that have a greater focus on capital stability. The proposed new sector would exist in parallel with the existing money market sector, and would have stricter limits on the type of instruments funds can invest in and their maturity.

To seek views on its proposals, the ABI has launched a consultation. The closing date for the consultation is May 8 and will be reported on shortly afterward.

“The introduction of a new sector is to help consumers find funds that offer greater stability," said Maggie Craig, the ABI’s director of life and savings. "This is not about the introduction of new funds, but rather to bring-in clearer labeling of what already exists. The new sector will run in parallel to the existing money market sector. This initiative is in direct response to what consumers and advisers have been telling us they want. With volatility in the markets many people want to easily choose a stable way to invest their money.”

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