Prudential’s Egg online banking unit plans to start selling 169 mutual funds from 12 different companies over the Internet, the first fund supermarket for UK investors.
Prudential’s Egg online banking unit plans to start selling 169 mutual funds from 12 different companies over the Internet, the first fund supermarket for UK investors.
According to a report in the UK’s Financial Times, Egg Investments will offer funds from some of Britain’s biggest fund managers, including Mercury Asset Management and Schroders. The service will allow investors buy and sell fund shares through the Internet, and get daily information online on their accounts.
The Egg service will compete with US companies such as Charles Schwab and Fidel-ity Investments, which are developing fund supermarkets in the UK.
Fidelity plans to start a UK supermarket this summer, and Schwab and Interactive In-vestor International are preparing to introduce competing services by the end of 2000.
About 245 billion pounds was invested in UK managed funds at the end of January.
Experts say Egg will charge fund companies that make their shares available on its system an undisclosed amount based on sales. The Egg service will include 12 funds managed by Prudential’s funds management business, M&G Group. And will allow investors to trade stocks later this year.
Prudential started Egg in October 1998; investing 150 million pounds in Egg last year which contributed to a 47 percent decline in Prudential’s second-half profit. Pruden-tial says Egg will lose a further 150 million pounds this year and isn’t expected to be profitable until 2001 at the earliest.
At the same time Prudential is planning to sell as much as 25 per cent of Egg to the public in an initial public offering later this year.
Experts believe the Internet will account for half of all unit trust purchases by 2003. Fund supermarkets already are available in Germany where New York-based Citigroup is planning to start a service to compete with Deutsche Bank AG’s Bank 24 and Consors Discount Broker AG.
