Best and worst: Japan still spoils the five-year view - Equity Unit Trusts

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The Independent Online
A DECISION to invest in what was a booming Japanese market in 1989 has backfired, while investing in the Far East, excluding Japan, has paid dividends, according to a review of 952 equity trusts over the past five years.

Investors placing their cash in the top-performing Gartmore Hong Kong fund would have seen the value of their savings grow by 291 per cent in the five years to May this year.

Overall, 17 of the 25 top unit trusts invested in the Far East but excluded Japan.

The 25th best-placed fund, GT US & General, which specialises in North America, showed returns of 152 per cent over five years. It is one of four investing in the US that appear among the top 25.

However, putting money in Morgan Grenfell's Japan Tracker would have led to investors losing 17 per cent of its money over the same period. The company comes 948th among those listed by Micropal, the statistics research company.

Barclays Unicorn's Japan & General Fund fared even worse. It showed a loss of 28 per cent over five years, placing it 950th.

John Kelly, investment director at Barclays Unicorn, said the aim of the fund had been to try to avoid risk by tracking the Nikkei index.

Since then, the fund has changed managers and moved its operation from London to Japan. However, Mr Kelly warned: 'It will take some time for those numbers to drop out.'

Seven out of the 25 bottom-performing funds invested in Japan. But other sectors figuring among the worst are UK smaller companies and UK equity growth.

MGM Special Situations, a UK equity growth fund, lost almost 50 per cent of its value over five years and came in 952nd.

Gregor Logan, MGM investment director, said the fund had been poorly invested at the time of the October 1987 crash and shortly after, since when its strategy had changed.

'In the past two years it has been turning in a regular top-quartile performance,' he said.

------------------------------------------------------------------------ BEST AND WORST: EQUITY UNIT TRUSTS ------------------------------------------------------------------------ The best % 1 Gartmore Hong Kong 291.52 2 Hypo F&C US Smaller Companies 254.15 3 Abbey Asian Pacific 226.16 4 Stewart Ivory New Pacific 218.60 5 Mercury Gold & General 212.47 The worst 948 Morgan Grenfell Japan Tracker -17.09 949 Thornton Iberian Growth -17.21 950 Barclays Unicorn Japan & General -28.24 951 Waverley Canadian Balanced Growth -32.61 952 MGM Special Situations Growth -49.51 ------------------------------------------------------------------------ The table shows the percentage change, after five years, in the value of funds invested, as of 2 May 1994. Micropal ------------------------------------------------------------------------