Claire Van-Wyk-Allan, AIMA

CIFSC introduces new categorisation of alternative investment funds in Canada

Financial advisors and investors are set to benefit from new Category Definitions for Alternative Funds implemented by the Canadian Investment Funds Standards Committee (CIFSC). 

They replace the single blanket 'Alternative Strategies' category, which applied to all alternative funds irrespective of investment mandate or strategy.

The Alternative Investment Management Association in Canada (AIMA Canada) worked with the CIFSC to develop categories that recognise the diversity of alternative investment products in the market and allow meaningful comparison of performance between investment fund strategies. AIMA Canada was made a non-voting member of CIFSC in 2018.

The categories, which reflect the alternative investment strategies most currently and widely used in Canada, are:

Alternative Equity Focused
Alternative Credit Focused 
Alternative Multi-Strategy 
Alternative Market Neutral
Alternative Other

AIMA Canada will continue to work with the CIFSC to help expand the categories further as new funds launch to take advantage of a growing regional alternative investment market. 

Claire Van-Wyk Allan (pictured), Head of AIMA Canada, says: "The expansion of these categories is a significant and important change. Retail advisors and investors can now better compare fund strategies on performance and benchmarks, rather than scrutinizing through a single bucket of diverse hedge fund strategies. AIMA is very grateful to the CIFSC for their progressive and positive action.”

Belle Kaura, Chair of AIMA Canada, says: “The introduction of five new categories of alternative funds by the CIFSC serves to replace a single umbrella alternative funds category. This is a pivotal step forward in helping make alternatives a more mainstream choice for investors and advisors, who will now be able to make meaningful fund comparisons across different types of alternative strategies. The creation of specific categories of alternatives seeks to ensure consistent and rational categorisation by grouping analogous investment strategies with similar risk-return profiles, allowing for effective peer evaluation.”

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