Fund supermarkets' are often mentioned in the financial media, but what exactly are they? Put simply, they help investors who wish to transfer Individual Saving Accounts (ISAs) and Personal Equity Plans (PEPs) to find a cost-effective way to improve the range of investments in their portfolios, although this is only one reason for using them. The crucial thing is that funds from many different managers can be held under one plan manager.

Piling high, selling cheap

Fund supermarkets first appeared in America and are now becoming increasingly popular here. They work just like food supermarkets, with a wide range of different products from different companies on their shelves. As an investor you compare all the goods (funds) and select as many as you want. Then you simply pay for them, often taking advantage of the big discounts that the supermarkets can offer because of their policy of bulk buying - effectively piling goods high and selling them cheap.

  'Fund supermarkets work just like food supermarkets, with a wide range of different products from different companies on their shelves.' 

Second thoughts

Fund supermarkets offer their own version of an exchange policy to keep investors happy. So if you have second thoughts and decide at any time that one of the funds you bought was a mistake or no longer suits your needs, you can move the money into a different fund - again, often at a substantial discount to the normal reinvestment fees (switch costs are low but not negligible).

We will help you

The choice of goods (funds) on offer in a fund supermarket can be bewildering, as you have to weigh up the differing claims of a wide selection of products, from those with big brand names to those from less well-known providers. We provide our clients with complete independent analysis, so that any new investment or transfer is based on sound financial research.