Best and worst: UK Equity Growth Unit

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The Independent Online
ANYBODY who wants toinvest in a fund in the UK Equity Growth sector will be faced with a bewildering diversity of investments.

The top-performing fund over one year, run by Exeter, is invested in the capital shares of split-capital investment trusts. These shares amplify any movement in the market.

David Hackett, fund manager, said that the fund had increased its weighting in more defensive stocks after the Federal Reserve in the US tightened its interest rates earlier this year. 'We had a fair bit invested in M&G's Dual investment trust, and some in the General Consolidated investment trust.'

Mr Hackett said that he was gradually going to increase exposure to more aggressively managed investment trusts as the market picked up. 'The largest shareholding is in the Throgmorton Dual trust, with investments in S&P Linked and River & Mercantile.'

M&G's fund has benefited from being invested in companies with capitalisations of less than pounds 300m - 45 per cent of the fund is invested in companies in this sector. Particularly good perfomance has come from companies with capitalisations of between pounds 10m and pounds 20m.

Rupert Pummell,fund manager, said: 'One particular example of a company that has performed extremely well is Havelock Europa - a shop fitting company. Two years ago they had problems. They have managed to cut costs and make a substantial recovery.'

He said that the company was likely to go from strength to strength as it had recently been asked to come up with plans for the new National Lottery offices.

Sovereign's fund has to operate within certain set, ethical criteria. It cannot invest in companies that are, for example, involved in gambling, alcohol and arms manufacturing.

The fund's performance has been less than sparkling over one year because it holds shares in the Telegraph group. The share price plummeted following the group's decision to cut the cover price of the Daily Telegraph. Tony Perks, Sovereign funds manager, said: 'We also had to write off a couple of shareholdings in small hotel groups.'

The trust holds 65 shares with a bias towards smaller companies, although among its biggest shareholdings are Carlton, Wessex Water and British Telecom.

The perfomance of Laurentian's fund was also hit by having a higher weighting in hotel chains at the end oflast year. Nigel Quinnen, director of UK equities, said: 'We are beginning to move out of those, and the peformance of the fund over the last six months has been substantially better. It is 21st out of the sector.'

He added: 'The fund has also has shareholdings in Saatchi, Fisons and Eurotunnel.'

----------------------------------------------------------------- UK EQUITY GROWTH UNIT ----------------------------------------------------------------- The best pounds 1 Exeter Capital Growth . . . . . .121.10 2 Evermore Recovery . . . . . . . .120.12 3 Fidelity Recovery . . . . . . . .115.12 4 Cavendish Investment Opport . . .115.06 5 M&G Capital . . . . . . . . . . .115.04 The worst 137 Sovereign Ethical . . . . . . . 96.59 138 Allied Dunbar Recovery . . . . .96.52 139 Laurentian Recovery . . . . . . 95.47 140 GT UK Capital . . . . . . . . .95.35 141 PC CAM Intl Recovery . . . . . .91.69 ----------------------------------------------------------------- Figures are for the return on pounds 100 invested over one year until 1 August 1994. ----------------------------------------------------------------- Source: Micropal -----------------------------------------------------------------