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Share of Flows Through U.K. Supermarkets Said Likely to Grow


Fund supermarkets will account for at least 25 percent of annual net new inflows to British authorized funds by 2004, according to a report by Cerulli Associates of Boston.

The share could rise to as much as 35 percent or 40 percent, according to the report. Smaller fund supermarkets will not be able to compete with larger ones and so two to four fund supermarkets will account for 90 percent of supermarket retail fund assets in the U.K., according to the report.

The report is based on interviews with fund management executives, regulators and data vendors in the U.K. The report also includes results from a survey of British independent financial advisors.

The study also concluded that:

- Locally registered retail funds in Britain, primarily unit trusts and open-end investment companies, will double in size over the next five years, to hold over $809 billion.

- By the end of 2004, distributions of British retail funds by independent financial advisors will account for 65 percent of annual net new inflows into British unit trusts, up from 51 percent at the end of 1999.

- Although the number of British online brokerage accounts could rise from 200,000 in June 2000 to 2.5 million by the end of 2003, the U.K. would still be behind other European online brokerage industries.

The full study, "Trends in the U.K. Retail Fund Management Marketplace," is to be released later this month.