Is it better to invest using a fund supermarket?

23/04/2010
by Lois Avery
Is it better to invest using a fund supermarket?

If you’re thinking of investing in funds then using a fund supermarket could save you time and money.

Funds enable small investors to pool their money with other investors to get access to more stocks or bonds than most people can buy or manage themselves. Funds can usually offer greater diversification, professional management and more convenience than investing in individual stocks or bonds and are looked after by a fund manager, who researches the market to try and provide a good return.

Why use a fund supermarket?

Because investing in funds can be complicated and time consuming many investors chose to research and manage their funds using a fund supermarket. These online platforms provide a facility for buying and selling a wide range of investment funds from different fund management companies. But one of the main attractions of a fund supermarket are the discounts and offers available to customers. 

Usually there is an initial charge, which you pay every time you invest in a fund and can be as high as 5.5 per cent.  But because fund supermarkets allow investors to shop for funds online from a number of managers and they buy funds in bulk, they are able to offer significant discounts on initial charges.

Sometimes investing via a fund supermarket can reduce the upfront fee by as much as 100 per cent and some even offer cashback when you invest your money or transfer certain amounts from other investments.

Easy to manage

As well as big discounts fund supermarkets can make buying funds and managing your investments straightforward by bringing them all under one roof. So if you have existing investments with separate fund managers a fund supermarket can help you consolidate all of your investments and bring them together in one place.

Investing using a fund supermarket can help bring a portfolio of investments together and because they are manageable online you can buy, sell and top up your investments without the paperwork.

Other advantages of fund supermarkets and services include the fact that they offer a wide choice of funds, and once you are registered you can easily switch between funds in the future, and the minimum investment is often as little as £500 or £50 a month.

Fund supermarkets also give you access to a large range of funds, Fair Investment Company allows you to choose from up to 1,300 funds from more than 90 fund managers, including Invesco Perpetual and Jupiter.

ISA investments

Funds can be used to take advantage of the annual ISA allowance by investing within your individual ISA wrapper.  Investors can either choose to invest their whole annual ISA allowance as stocks and shares within a fund, which is up to £10,200, or up to £5,100 can be invested, with the other £5,100 reserved solely for cash savings.

Using a fund supermarkets to do this bypasses hefty charges, some of which can be up to 5.50 per cent of the initial investment. This allows you to make the most of your tax free allowance in one go.

Existing ISAs can also be brought together into one place using a fund supermarket, allowing you to manage your ISA investments in one place while still getting the best interest rates deals available on the market.

Click here to read about the Fair Investment funds service »

© Fair Investment Company Ltd
 Product NameISA OptionIncome YieldMore Info
Invesco Perpetual Monthly Income Plusyes7.01%More Info >
Income Paid Monthly. Popular income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. See latest fund factsheet for details.
Newton Higher Incomeyes7.02%More Info >
Income Paid Quarterly. The objective of the Fund is to achieve increasing distributions on a calendar year basis with long term capital growth. The Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Invesco Perpetual Distributionyes6.70%More Info >
Income Paid Monthly. Invesco Perpetual Distribution offers a balance between both income and capital growth through investment in UK based equities and fixed interest securities. See latest fund factsheet for details.
Schroders Income Maximiseryes6.27%More Info >
Income Paid Quarterly. The Fund’s investment objective is to provide income with potential for capital growth primarily through investment in equity and equity related securities of UK companies. The fund will also use derivative instruments to generate additional income. See latest fund factsheet for details.
Henderson Strategic Bondyes5.90%More Info >
Income Paid Quarterly. Investing in higher yielding assets which will include most types of fixed interest securities, this fund aims to deliver a quarterly income to investors. See latest fund factsheet for details.
Invesco Perpetual Corporate Bondyes5.54%More Info >
Income Paid Twice Yearly. The Invesco Perpetual Corporate Bond Fund aims achieve a high level of overall return, with relative security of capital. It intends to invest primarily in fixed interest securities. See latest fund factsheet for details.
Global Equity Income Fund yes4.56%**More Info >
Equity and equity related investments across global markets aiming to provide income and growth. Save 100% on initial charges.
M&G Optimal Incomeyes4.67%More Info >
Income Paid Twice Yearly.The fund aims to provide a total return to investors based on exposure to optimal income streams in investment markets. The fund invests across a broad range of fixed income assets according to where the fund manager identifies value. See latest fund factsheet for details.
Strategic Bond yes4.42%More Info >
The primary investment objective is to maximise total return (income plus capital ) by investing in global debt instruments,denominated in any currency, ranging from AAA Government Bonds through to high yield and emerging market corporate bonds. At least 50% of the fund will be invested in sterling and other currency denominated bonds hedged back to sterling. See latest fund factsheet for details.
Artemis Incomeyes 4.50%More Info >
Income Paid Twice Yearly. This fund aims to provide an increasing income and capital growth from investing mainly in ordinary shares, preference shares, convertible bonds and fixed-interest securities in the UK. We will not be restricted in our choice of investments, either by the size of the company, the industry it trades in, or the geographical split of the portfolio. See latest fund factsheet for details.
UK Income Fundyes4.30%More Info >
Income Paid Quarterly.To provide an above-average and growing income without sacrificing the benefits of long-term capital growth by investing primarily in the shares of companies incorporated or listed in the UK. The Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Invesco Perpetual Incomeyes3.63%More Info >
Income Paid Twice Yearly. The Invesco Perpetual Income Fund aims to achieve a reasonable level of income, together with capital growth. The fund intends to invest primarily in companies listed in the UK, with the balance invested internationally. See latest fund factsheet for details.
Invesco Perpetual High Income Fundyes3.87%More Info >
Income Paid Twice Yearly. Popular with investors, this fund aims to deliver a high level of income combined with capital growth by investing primarily in UK based companies. See latest fund factsheet for details.
*Current Income Yields are Gross, Variable and Not Guaranteed
**Historic Yield reflects distributions declared over the past 12 months as a percentage of the mid-market price of the fund.
*** This is the target yield the fund aims to achieve per year, it is not guaranteed and could change according to prevailing market conditions. The target yield is net of basic rate tax.
Information correct as at 08/02/2012.

The value of investments and any return from them can fall as well as rise and you may not get back the full amount invested. Please ensure that you read the Important Risk Information below.