Best and worst: PEP-Qualifying Unit Trusts

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The Independent Online
COMPARING performance of Personal Equity Plans (PEPs) is difficult because of the variety of investments that can be held in them. But it is possible to rate unit or investments trusts that are eligible for inclusion in PEPs.

Trusts must have at least half their funds invested in the UK and EC to be eligible for up to the full pounds 6,000-a-year tax-free PEP allowance.

It is no surprise that the worst performing 'PEPpable' unit trusts include recovery and small company funds. Stuart Forshaw, manager of Arkwright Recovery, says its portfolio has been reorganised to include such names as Forte, British Aerospace and Pilkington.

The managers of the St James's Place PEP Progressive Trust attribute their success to backing larger UK companies in the last three years. They are switching to some smaller companies but John Hodson, the investment manager, says they are being highly selective as they fear the difficulties of selling small company stock if the market moves the wrong way.

St James's Place, previously known as Bishopsgate, is now part of J Rothschild Assurance. PEP Progressive invests about 20 per cent of its money abroad, which has helped its performance, Mr Hodson said.

----------------------------------------------------------------- PEP-QUALIFYING UNIT TRUSTS ----------------------------------------------------------------- The best pounds 1 St. James's Place PEP Progressive (Accum units). . . . 1,812.26 2 Perpetual High Income. . . . . . . . . . . . . . . . .1,570.41 3 Perpetual PEP Growth & Income. . . . . . . . . . . . .1,560.52 4 Stewart Ivory Investment Trust Income. . . . . . . . .1,529.94 5 Schroder Enterprise (Accum units). . . . . . . . . . .1,516.95 The worst 335 Touche Remnant Smaller Companies. . . . . . . . . . . 801.27 336 Equitable Special Situations. . . . . . . . . . . . . 777.38 337 Fidelity Recovery. . . . . . . . . . . . . . . . . . .767.82 338 Manulife UK Smaller Companies. . . . . . . . . . . . .766.50 339 Arkwright Recovery. . . . . . . . . . . . . . . . . . 712.85 Return on pounds 1,000 over three years, offer-to-offer, income reinvested Source: Chase de Vere Investments -----------------------------------------------------------------

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