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Supermarkets limit choice of offshore funds

Fund supermarkets are acting as an obstacle to increased offshore product sales, according to an HSBC survey.

It reveals that 84 per cent of advisers believe they would do more offshore business if platforms offered more offshore funds. The research shows that offshore funds make up 11 per cent of advisers’ existing investments but that 54 per cent expect they will do more offshore fund business in five years time.

HSBC Investments wholesale managing director Andy Clark says advisers are not getting access to the best selection of products on supermarkets.

He says: “By focusing on UK-domiciled funds, platforms are offering access to a good range of UK equity funds and a limited choice of specialist funds such as those available in emer-ging markets or alternative asset classes.

“Much of the innovation in mutual funds is not readily available in the UK. The rest of the world is gaining acc- ess to global fund ranges but the UK is behind because UK investors find these difficult to access.”

According to the poll of 50 intermediaries, 92 per cent who use offshore funds opt for them because of their tax efficiency, client requests and the availability to diversify assets.

Clark says: “This research indicates that if offshore funds were available via supermarkets, these would be increasingly bought by intermediaries. In fact, intermediaries surveyed were already using offshore funds but as a smaller proportion of their business given the distribution issue.”

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