I knock a lot of bad financial products in this newsletter, so for a change I want to mention a really good one- not only is it exceptionally useful, but it’s free. It’s the ‘fund supermarket’.
To appreciate how useful fund supermarkets are, look at what happens if you invest in what used to be the normal way. If you go to a fund management group and say you want to invest in one of their unit trusts, they’ll demand an initial charge of up to 5% - that’s £250 on a £5,000 investment, which they take off the money you invest.
They’ll post you half-yearly reports but to find out what your investment is worth you’ll have to look up the price of units, get out your calculator and multiply by the number of units you own. Invest in several funds run by different management groups and you’ll have a blizzard of bumf.
Get massive discounts on charges
Now compare that with setting up a fund supermarket account, which costs you nothing. You can pick from a wide range of funds (at least several hundred) and buy them online at much reduced or even no initial charges. You can hold funds run by different management groups and when you access your account you can get instant online valuations of the lot. And through the fund supermarket you can also get fund factsheets, performance data and charts.
Click here to check out our fund supermarket links
Click here to access our top fund best buy tables
You can set up both ISA and non-ISA accounts, and it’s easy to add money or withdraw it. If you already hold funds, you can transfer them into the supermarket so that you can manage them more easily.
Whether you are buying my recommended funds or your own choices, there will be times when you need to switch from one fund to another. Not only is this easier with a fund supermarket, it’s cheaper - you can save up to another 5% in charges.
So the fund supermarket is the ideal way to build up a fund portfolio and with my selection of
best buy funds in different sectors provides a simple, low-cost way for you to manage your investments.
We have links to two of the biggest
fund supermarket and have made it easy for you to access an existing account or set up a new one.
Unlike a lot of financial products, fund supermarkets really do provide something useful and valuable- no wonder they are a resounding success. If only the financial services industry could come up with more products like this... I’d have a lot less to write about!
