Fund supermarkets help investors to 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.

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.

If you plan to go on a shopping spree, we can advise you how to get the best for your money. Please e-mail or contact us for further information.

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.

Article date January 2004