Best and worst: Unit trusts

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The Independent Online
THE performance of the top unit trusts over one month was heavily influenced by the Mexican elections.

In the three weeks leading up to the vote in the middle of August, the market rose sharply in anticipation of the election of Ernesto Zedillo. His success should mean that the economic growth engineered by his predecessor is maintained.

Gavin Grant, head of the Latin American department at Edinburgh Fund Managers, said: 'There is fundamental growth in the Mexican market. We are increasing our asset allocation. It will be interesting to see whether Zedillo continues his predecessor's commitment to keeping down inflation, or whether he will increase public spending.'

About 40 per cent of the fund is invested in Mexico, with a further 20 to 30 per cent invested in Brazil.

Benoit Bouchaud, in charge of Save & Prosper's Latin American fund, said: 'The election result came out as expected in Mexico.'

S&P's Latin American fund also has a high weighting in Brazil. 'There has been continued recovery in Brazil, with reduction in the inflation rate,' Mr Bouchaud added.

One of the main tools for reducing inflation came in at the beginning of July when the government introduced a new currency, linked to the US dollar.

Brazil is also having an election at the beginning of October, which may produce a repeat of the Mexican rally. Mr Bouchaud said he had recently cut back the fund's weighting in Brazil because of the previous huge rally in the market after the currency change, which had resulted in some profit taking.

At the bottom of the tables over one month are those funds that are invested in European or global bonds. Chris McGinty, fixed-interest manager at Murray Johnstone, said: 'There are a number of economic indicators that point to increases in interest rates. During the month, both Italy and Sweden raised interest rates.'

------------------------------------------------------------------------ UNIT TRUSTS ------------------------------------------------------------------------ The best % 1 Edinburgh Latin America 15.12 2 Prov Capitol Latin America 15.02 3 S&P Latin America 14.49 4 Govett UK Equity Income 13.69 5 Gartmore Shaw Utilities 13.65 The worst 1390 Murray Global Bond -3.78 1391 Fidelity Gilt and Fixed interest -3.86 1392 Schroder Seoul -4.62 1393 Thornton Dresdner Eurobond -4.79 1394 Semper Eadem Sector -4.81 ------------------------------------------------------------------------ Figures show the return over one month to 1 September 1994. Based on prices on an offer-to-offer basis. ------------------------------------------------------------------------ Source: Micropal ------------------------------------------------------------------------