Best and worst: Managed Currency Funds

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The Independent Online
WILD movements in world currency markets last year brought some spectacular profits for speculators.

UK investors have access to a number of offshore-based currency funds. Private investors will usually prefer a managed fund, where their investment is switched between currencies depending on the manager's view of how markets will move. The average profit on these funds last year, before expenses, was 22.5 per cent for a sterling investor, which looks good compared with profits on unit trusts. And currency funds of investment trusts, even managed ones, are high-risk.

The Guernsey-based Guinness Flight Managed Currency Fund was heavily invested in the dollar and yen most of last year, said Nick Smith, Guinness Flight marketing manager. 'It is still biased towards the dollar and yen because these are likely to go up this year, whereas we expect European currencies in general to weaken because of interest rate cuts.'

Tim O'Leary, adviser to the Hambros sterling fund, also says he is backing the dollar as the star currency performer of the year.

Investors cannot buy into last year's top performer, Thames Currency, managed by a subsidiary of NP Record Group, a Bermuda-based specialist company. The fund is no longer open and was never authorised for marketing direct to UK investors.

----------------------------------------------------------------- Table: MANAGED CURRENCY FUNDS ----------------------------------------------------------------- The best % 1 Thames Currency NAV 93.0 2 AIB Grofund USdollars 36.5 3 Jardine Fleming 31.6 4 Providence Capitol Int'l 30.3 5 Guinness Flight 28.6 The worst 43 IBI International 12.5 44 PFC Leveraged Cross Curr & Bond pounds 12.1 45 Scimitar World Money Managed pounds 9.7 46 Ermitage Cash 7.7 47 Hambros Currency Managed Sterling 7.1 -----------------------------------------------------------------

Average percentage gain in sterling, one year to 1 January 1993, net income reinvested, offer to offer. Source: Finstat

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