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| Fund
supermarkets help investors find a cost-effective way to improve
the range of investments they hold in their portfolios. They
let you pick-and-mix the best from many funds and fund managers
in a host of different sectors, rather than relying on a ‘same
size fits all’ approach. |
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Q:
Where did fund supermarkets originate?
A:
They first appeared in America and are becoming increasingly
popular in the UK.
Q: How do they work?
A: 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.
Q: What investment flexibility do I
have?
A: Fund supermarkets offer their own version of an
exchange policy to keep their 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. However, be aware
that this could give rise to a capital gains tax charge and/or
extra management charges.
Q: What degree of investment choice
do I have?
A: The choice of 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 can
give you a complete independent analysis, so that any new
investment or transfer is based on sound financial research.
Q: What type of products can I put into
my basket?
A: Fund supermarkets offer unit trusts and OEIC funds
from scores of different fund managers. We can help you select
the most appropriate solutions from the hundreds of different
funds now available.
Q: How do I know which funds and companies
to choose?
A: Once we have discussed your requirements, we conduct
the independent research on your behalf. This includes researching
the fund’s investment objectives and checking the credentials
of the fund manager. We look, too, at the size and financial
strength of the fund management company (and its parent if
relevant). We check the fund’s yield and compare it
with rival funds, especially if you are investing for income.
We also consider charges and any discounts you may get through
the supermarket. As a final consideration, we look at how
the fund or funds will fit in with any existing investments
you may hold.
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Levels
and bases of, and reliefs from, tax are subject to change.
Because these investments may go down in value as well as
up, you may not get back the full amount invested, especially
if you withdraw from it in the early years. Past performance
is not necessarily a guide to the future. |
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