Best and worst

Nic Cicutti
Sunday 18 December 1994 00:02 GMT
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Investing in unit trusts that focus on overseas markets always carries a degree of risk, as some markets will head downwards at the same time as others show significant growth.

Over the past year this has been the case with the international growth unit trust sector. Funds in this sector are distributed throughout the world's markets and may also include more specialised overseas equities.

The result can be big swings in performance, depending on the country - or on which part of its economy - fund managers invest their money.

Funds invested in Latin American equities have been the success story of the past year, while those still in Hong Kong or other parts of the Far East have suffered.

The five top funds of the 154 in this sector over the past 12 months specialise in Latin America or have significant exposure there.

The losers include Prosperity Emerging Markets, which appeared among the top 10 funds in this sector nearly every year in the past seven, until its heavy exposure to Hong Kong caused its value to drop in the past 12 months.

Sue Taylor, investment liaison executive at Prosperity, said: "Last year the trust was doing particularly well, having benefited from a rise in the Hong Kong market. Over the past year, this market has been influenced by what has been happening in China,which has been affected by high inflation and a downturn in sentiment towards the Chinese market.

"Also, Hong Kong has been affected by what is happening in the United States, particularly the rise in interest rates over there."

Although a significant part of Prosperity's fund is still held in the Hong Kong market, it has switched towards Mexico and Brazil in recent months.

A different picture emerges from Framlington's Health Fund, which is currently last in this sector. Anne McMeehan, managing director of Framlington Unit Trust Managers, said: "This kind of fund has always tended to be either top or bottom.

"It is highly specialised, investing in health, medical or biotechnology funds, while 77 per cent of its exposure is in the United States.

"For UK investors, this means that the fall in the value of the US dollar has had repercussions on the value of the fund, while Hillary Clinton's health reform programme depressed shares over the past two years."

Ms McMeehan added that the collapse of the Clinton reforms had taken the fund into the top 10 performers in the past quarter.

INTERNATIONAL GROWTH UNIT TRUSTS The best % 1 Edinburgh Latin American 9.8

2 Providence Capitol Latin American Cos 8.5

3 Abtrust Latin American 7.7

4 Stewart Ivory Emerging Markets 6.9

5 Laurentian International 6.8

The worst 150 PC Temple Equity -11.1

151 Prosperity Emerging Markets -13.4

152 Mayflower International Leaders -13.4

153 Chartered International Growth -14.7

154 Framlington Health Fund -15.5

The table shows the percentage rise or fall over 12 months to 1 December, offer to bid, net income reinvested. Source: HSW

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