Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.



There are alternatives to funds of funds that offer similar benefits. Skandia, for instance, offers a multi-ISA which gives investors a choice of 97 unit trusts and Oeics from various fund managers under a single umbrella. But this service costs 4.5 per cent up front and 0.75 per cent annually, on top of an initial charge and the annual fee for each fund.

A Skandia spokesman points out that if you were moving funds between ISA managers on the open market you'd pay more than a 0.25 per cent initial charge. But Amanda Davidson, at Holden Meehan, does not see the benefit: "You can achieve what you want through a collection of PEPs and ISAs with different providers over several years - it's easy to transfer if you get fed up."

If you have more to invest - at least pounds 50,000 - a portfolio of unit trusts can be managed by investment houses such as Churchill. This approach is generally fee-based - you'll pay around 1 per cent a year, and will probably also benefit from reductions in front-end charges. "But the drawback is that each time you sell a holding, you'll be up for capital gains tax," says Churchill manager Malcolm Weightman. "That's the big advantage with funds of funds."

n Skandia MultiISA: 01703 334411; Churchill Investments: 01934 844 444.