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Too many funds on supermarts

Up to 70 per cent of funds offered on fund supermarkets are never bought by private investors, according to Egg.

It believes the majority of funds on many direct supermarkets are superfluous to investors&#39 requirements and are ignored in favour of the most straightforward products.

Egg claims exhaustive lists of unit trust and Oeics are a waste of time as they are not understood by many investors.

The only instances in which Egg believes such ranges of funds are necessary are on supermarkets for intermediaries using an online platform. Egg claims industry experts who insist supermarkets cover the whole spectrum fail to recognise this distinction.

To offer a true choice to investors, Egg says direct supermarkets should start to offer an alternative rather than a reflection of the current market. It believes this would provide investors with the opportunity to diversify portfolios and reduce the level of volatility of their investments.

Egg head of investment products Rob Hudson says: “There will always be an interest in the universe of funds from a very small minority but the mass investing public complain of too much choice, conflicting information and a lack of product innovation to help pick a fund each Isa season.”

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