Money: An investment basket

High street shares: Rachel Fixsen peps up her shopping list
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The Independent Online
Rice crispies, semi-skimmed milk, bin liners, a building society account - and 100 Rank Group convertible preference shares. Stock market investments could be just another item on your shopping list these days. On the high street, building societies now offer packaged equity products which are low-risk enough to attract the cautious saver.

Familiar names such as Woolwich Building Society, Co-operative Insurance Services and Halifax Building Society all offer equity unit trusts, usually through a tax-free personal equity plan (PEP).

Halifax started offering its own PEPs in 1995, and believes it has tapped a new market, with its high street accessibility attracting savers from outside the professional classes towards equity investment.

"The customers we have are often first-time buyers of equity products and they do like the comfort and trust of being able to go and deal with someone they know and who in their eyes is tangible," says John Warburton, investment product manager at Halifax.

Halifax offers PEP investments in its Income Trust and its Growth Trust. These funds have only been running for two years. So far, both have slightly underperformed their competitors, and fees are above average. The spread between the price you buy and sell at is 5.68 per cent, and the annual management fee is 1.5 per cent of the total investment.

Woolwich offers three funds - its UK Stockmarket Fund, an International Managed Fund and its Corporate Bond Fund. To make investing seem as simple as possible, Woolwich has a Stockmarket Card, which investors can use to buy and sell units and check how much their investment is worth at any time.

Though linked to the long-standing household name, Co-operative Insurance Services has no retail outlets and operates through direct sell either by post or phone. It has three unit trust funds: UK Growth Trust, UK Income Trust and Environ Trust - the UK's largest ecological fund. All have performed better than average within their sector over the past five years, according to the financial information provider MoneyFacts.

Many other building societies sell PEPs, though most are managed by an insurer. It is easy to buy a PEP on the high street, but are you sacrificing potential performance for convenience?

Independent financial advisers say you should give yourself more choice. "There might be another product out there that's more appropriate to your circumstances," says Graham Hooper, investment director at IFA firm Chase de Vere, in Bath.

Mr Hooper says it is no coincidence that the performance of these building society funds lags behind that of the more established fund managers. According to MoneyFacts, a pounds 1,000 investment in the Woolwich's UK Stockmarket Fund three years ago would now be worth pounds 1,282.55, while in the Perpetual Income fund it would have grown to pounds 1,402.09.

However, Woolwich says its fund is invested very conservatively. "It invests in blue chip companies. As a building society we've deliberately set up risk-averse funds - we don't like volatility," says Ian Jackson, operations manager at Woolwich Unit Trust Managers. "The Woolwich feels it is in the savings market, and that goes through from deposits to equities."

But the outlook for the market is uncertain at the moment, with the imminent election and some concerns about how the economy is going to develop over the next six months, says Richard Jeffrey, group economist at merchant bank Charterhouse. "For inexperienced investors, you don't want to invest just ahead of a period of uncertainty, because you can get your fingers burned in the short term."

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