COFUNDS EXPLANATION

What is Cofunds

We encourage our clients to make their investments through the Cofunds administration system. This system provides a convenient single point of reference, at no additional cost to the investor. Please note that a small number of funds are not available via Cofunds and should you have any specific queries, please contact your usual clarity adviser.

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Who owns Cofunds

Cofunds is owned by 6 shareholders, and the shareholder investment percentages are as follows:

• Legal & General 25%
• IFDS 24%
• Newhouse Capital Partners 18%
• Threadneedle 17%
• Jupiter 13%
• Prudential 3%

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What service does Cofunds provide?

Cofunds administers investments in the same way as existing fund providers do.

They arrange for and oversee the transfer of existing holdings.

They maintain a detailed record of investments and provide a consolidated valuation at half yearly intervals.

Investors are able to purchase and sell units and shares in a wide range of funds in a single transaction and consolidated contract notes are issued.

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What is a portfolio x-ray?

In addition to the half yearly valuation, active clients can receive copies of their portfolio analysis as provided by Morningstar. This is not sent by Cofunds half-yearly, clarity will bring a copy along to your meetings. Please click here for an example.

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What is the cost?

Cofunds does not charge investors for its normal service. Cofunds takes a small proportion of the standard annual management charge levied by the fund provider. Fund providers are happy with this arrangement, as they save on their administration and communication costs.

Investors will benefit from the competitive discounts that clarity has negotiated with the fund managers.

There are, however, a small number of companies who do charge a nominal amount.

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How do I change my investments held within Cofunds?

Once an investment has been made via Cofunds, funds can be switched between funds simply and quickly using a request form available from clarity. Investors should note that re-investment into a new fund will be subject to the initial charge levied by the provider. Where the investment is not an ISA or PEP, the switch will count as a disposal for Capital Gains Tax purposes.

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Can I make ISA investments through Cofunds?

Both Mini and Maxi Stocks and Shares ISAs can be purchased through Cofunds thus giving the additional advantage of holding funds from more than one provider within a single ISA. Cofunds does not, however, accommodate the purchase of individual shares (including investment trusts), only unit trusts/OEICs.

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Can I make regular contributions via Cofunds?

Regular savings can be made to ISAs, but this is not yet available for Unit Trusts or OEIC Funds. If you wish to make regular contributions to a Unit Trust or OEIC, please contact clarity.

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Can my existing investments be accommodated within Cofunds?

Unit trust and OEIC investments within any of the participating funds can be transferred in specie at no cost, although those held in a nominee name may be subject to a charge by the nominee company. This is very exceptional but can apply to holdings, in particular self invested pensions.

Most ISA and PEP holdings can be transferred in the same way through a process of re-registration. This means that you do not spend any time out of the market and your Cofunds account will show exactly the same number of units/shares after the transfer has been completed. In some instances, you may receive a charge.

For those companies that do not offer re-registration, there will technically be a sale and repurchase so the number of units once invested in Cofunds may differ. This will be in the main because the fund will be in cash for a few days. During this process the markets may move either for or against you.

However, this accepted, the majority of funds will be transacted at nil initial charge on reinvestment as a result of clarity waiving the 3% initial commission. With certain exceptions, there may be a net charge as there would be for a new deal (if no preferential terms from the investment) but clarity would again disclaim initial commission.

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Will the security of my investments be affected?

You will be recognised as the beneficial owner of your investments, and you must not assign this right to any other person or organisation.

Underlying fund holdings will be amalgamated with other investors, and held in the name of Cofunds Nominees Limited.

Cofunds is authorised and regulated by the Financial Services Authority and investments with Cofunds are covered by the Financial Services Compensation Scheme.

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What if I do not want to use the Cofunds system?

Not a problem. Please contact clarity, and we will be happy to supply you with conventional application forms that will enable you to invest directly with each management house.

Click here to return to the Self Select Investment page, where you can print out application forms and key features literature for Cofunds.

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Can I view my Cofunds valuation online?

You can view your Cofunds ISA/PEP/Investment Funds valuations online as part of a consolidated valuation, please click here to view the details.

Your Cofunds reference number can be found on your last statement and can be added to Your Profile. If you have any problems obtaining a reference number, then please contact clarity.

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