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DIY Investor: In the hands of the few

A market dominated by a few dozen vast funds does not necessarily deliver a better deal for the private investor

In 2013 more than 90 per cent of the new money that investors put into the markets went to just 10 funds. When I stumbled upon this statistic, it seemed so extraordinary that I couldn’t help but doubt it—but a check using data from investment research firm Morningstar proved that it was true: 93 per cent of the net flows (offsetting redemptions against new investments) ended up in 10 funds, run by seven fund management firms.

The data is similar for 2012, and this year is shaping up the same way. You have to go back to 2008 to find…

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