What would you like us to do with the funds you've selected
This shows the number of portfolios you hold. Portfolios can be constructed from Unit Trusts & OEICs,IMA Unit Trusts & OEICs,Investment Trusts,Pension Funds,Life Funds,Offshore Funds,Exchange Traded Funds and cash. Holdings and acquisition costs can be recorded so that profits/losses can be calculated. These can be calculated in terms of a number of base currencies. Overall portfolio values, as well as portfolio constituents, can be made the subject of alerts.
You have one watchlist, and this shows you the number of items currently stored in the watchlist. Items stored here do not have holdings records, so this list simply monitors the price of items held, which can also be subject to alerts
This is designed to be a temporary collection of items selected by you for further analysis in the tools section. Items can be subsequently transferred from the Basket to the Watchlist or Portfolio.
What proportion of your ISA is made up of direct stock positions?
What is the concept of a fund supermarket?
There is a multitude of fund supermarkets available online. Differences can be found in the number of funds on offer, services and functionality. Most fund supermarket models offer no advice, although many provide research tools to help you decide which funds to invest in. Let us consider the following aspects:
There is still no consensus view of what a fund supermarket should be in the UK. Some believe that only those web sites that have online dealing capabilities can be labelled a true fund supermarket. Others feel that a supermarket should offer paper-based and telephone access to funds as well as via electronic means, giving the investor the power to choose the channel through which they invest. The definition of what constitutes a fund supermarket is not made clearer as established companies develop their services.
One of the innovations to be added is re-registration, which was introduced in 2002. Re-registration allows the movement of existing holdings, for example, ISA investments held with different management groups, to the supermarket without having to sell and repurchase. Essentially it means that the investor gains the benefits of supermarket investment, such as consolidation, without having to move investments out of the market. It is as well, though, to be aware that not all of the management groups listed on supermarkets are currently participating in re-registration.
Many of the fund supermarkets currently in the market offer online transactions, but there are some inconsistencies that can make the investment process convoluted. In order to invest online some sites require the investor to complete and post a registration form. Others allow an online application form for lump sum investments, but monthly investments must be posted with a cheque. Due to money laundering regulations, supermarkets that do offer an online service will only accept debit cards as payment. It may be convenient to use fund supermarkets that allow holding all purchases in a single account, and which issue a consolidated statement.
The investment tools offered may also affect the choice of supermarket. Only a few fund supermarkets offer financial advice; many instead have research tools to narrow fund choice according to investor-specified criteria. Some tools may help assess attitude to risk as a route towards selecting a fund. In many cases it is possible to view the performance and Key Features of a fund. Some supermarkets have a basic education section; others tailor whole sites according to the user’s level of investment experience. If unsure about any purchase, many supermarkets provide details of how to contact an Independent Financial Advisor. Some IFAs also provide their own fund supermarkets and offer the choice of contacting an adviser on or offline.
There is usually no cost for using the supermarket, although some that offer additional financial services may charge a fee. Many supermarkets offer substantial discounts on the initial charge (or set up charge) of a fund. Initial charges for direct investment with the management group could be as high as 6%, whereas fund supermarkets can reduce this cost to as low as 1%, and some remove the charge altogether.
Ongoing charges such as annual fees are rarely discounted. To entice investors to invest in a particular way some supermarkets have discounts on lump sum investments only and have a fixed initial investment amount. There may also be a small fee for transferring money to another fund within the supermarket range; again the rules may be different according to whether there is a switch between funds within the same management group or the investment is moved to a different group.
Fund supermarkets are able to offer discounts by negotiating the cost with product providers. The product providers give part of the management fee paid to them to the supermarket as commission; in return management groups benefit from reduced fund administration costs. Smaller providers also have the added advantage of being viewed by a wider audience. Although supermarkets can be used as a cheaper alternative to investing directly with the product provider, initial charges may be even lower through other channels, such as via a discount broker offering a no-frills facility.
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13:00 | Monday, January 20, 2014