THE HI-TECH INVESTOR: Last of the big brokers targets the big E-asy

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The Independent Online
TD WATERHOUSE is the second largest discount stockbroker in the world, and the last of North America's "big four" to open its doors to online trading in Britain. With E*Trade, Charles Schwab and DLJ Direct, Waterhouse has been behind much of the internet share dealing growth across the Atlantic.

Waterhouse has run a phone-based service in the UK for several years. It recently bought Yorkshare, the stockbroking arm of the Yorkshire Building Society.

For investors, its decision to offer internet trading should bring long- term rewards. Since the start of summer, launches by E*Trade and DLJ Direct, as well as domestic stockbrokers such as James Brearley and Halifax, have meant that anyone who wants to buy and sell shares has an unprecedented choice. Inevitably, dealing costs are falling.

Waterhouse is offering commission-free trades until 8 January. DLJ Direct is running a similar offer. So, two large-scale execution-only brokers are cutting charges to the bone in order to build up market share. In the new year, Waterhouse will charge from pounds 12.95, neither the cheapest nor the most expensive on the market. Frequent traders can join a club, with a flat rate of pounds 14.95 for transactions up to pounds 100,000.

This merits more investigation by anyone who buys and sells large amounts of stock. Membership is open to investors who carry out at least 15 trades a year. All clients pay annual fees for their nominee accounts.


Trust in technology

M&G, the Prudential-owned fund manager, has launched a new technology unit trust, the Global Technology Fund.

The fund invests in telecoms, hi-tech hardware and components, biotechnology, software, and media and internet companies.

Minimum investment is a pounds 500 lump sum, or pounds 10 a month. The fund can be held in an ISA (individual savings account).

Appropriately, investors can buy units online using a debit card, and the fund has its own area on the M&G website.

As with most hi-tech funds, the bulk of the money - some 76 per cent - is invested in the United States.

M&G's entry into this market reflects the growing importance of the technology sector, and the fund's website is a useful resource.

However, cost-conscious investors should ensure that they shop around as M&G charges 1.5 per cent for annual management and levies a 5 per cent initial charge.

Stephen Pritchard can be contacted at: