Best and worst: Safer ride for offshore cash - UK Equity Offshore Funds

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The Independent Online
OFFSHORE investment may still be tainted by the collapse of Barlow Clowes, writes Caroline Merrell.

However, since that scandal regulations have been tightened and it is now possible to invest in some offshore funds while retaining the same degree of protection as someone investing onshore.

About one offshore fund in 10 is authorised by the Securities and Investments Board. These can be actively marketed in Britain through independent advisers and are covered by the SIB's investor compensation scheme. Unauthorised funds are not covered and fund managers are not allowed to market them onshore, although British residents can invest in them directly or through an adviser.

Offshore funds can be a way to defer tax but you will eventually have to pay when it is cashed in or if you draw income from them.

Peter Halliday, administrative manager of Sun Life Global, noted that this year's finance bill contained a proposal to allow indexing of capital gains on offshore funds for the first time.

Sun Life puts the poor performance of its Global UK Growth fund down to its conservative investment philosophy and its small size.

Perpetual's top performing UK equity fund is aimed at the expatriate community and is not SIB authorised. Roger Cornick, marketing director, said the dollars 60m ( pounds 40m) fund was invested in a diverse range of about 85 stocks, which helped performance.

Albany's two funds are run externally by Mercury managers. The Blue Chip fund has outperformed by investing in highly capitalised companies. Stuart Perilli of Albany International said: 'The fund benefited from being invested in the right sector at the right time.' He said the company's UK sterling fund was geared towards less capitalised companies.

------------------------------------------------------------------------ UK EQUITY OFFSHORE FUNDS ------------------------------------------------------------------------ The best % growth 1 Perpetual Offshore UK Growth 130.0 2 Albany UK Blue Chip Sterling 97.8 3 Gartmore CS British 92.0 4 Axa Equity & Law Life UK Equity 91.9 5 Hypo F&C RA UK Equities 89.0 The worst 33 Albany UK Sterling 37.5 34 Mercury OST United Kingdom 34.9 35 Duncan Lawrie Sterling 34.1 36 Sun Life Global-UK Growth 32.1 37 Hansard UK Equity 29.2 38 RBC British 13.4 ------------------------------------------------------------------------ Percentage growth over five years, offer to offer. Source: HSW ------------------------------------------------------------------------

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