Look at league tables to spot trends

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The Independent Online
LOOKING at best and worst performing funds only ever gives you a snapshot of the unit trust market at a particular time, and it can be dangerous to play 'follow the leader'. But it can help to find out why a unit trust performed particularly well or badly.

Statistics from HSW to 1 September show Gartmore Shaw Utilities as top of the UK general table over one year. It is a broker fund, with the investment decisions taken by the Crowborough-based stockbrokers Shaw & Co.

Bill Day of Shaw & Co says the fund was born 18 months ago from a realisation that there was no unit trust the firm could use for its clients to invest in utility privatisation stocks. Although the fund has been hit in the past week by falls in utility stocks after Labour's promise to tax them more heavily, Mr Day still believes it to have potential.

Over five years the best performing UK General fund is Schroders UK Income & Growth. The fund's manager, Jim Cox, is faintly surprised that others do not get closer to his results, and puts the success down to conventional stock picking - buy shares cheap and sell when they are expensive. The worst performers in the UK General sector are Fidelity Growth and Income over one year and Dolphin UK and General over five years. In 1990 Dolphin had invested heavily in smaller companies, which underperformed over the following two years. The manager was changed and the portfolio was reoriented towards larger stocks, but the benefits are only just being seen.

In the market as a whole, the most spectacular underperformer for one year is City Financial Beckman Bio Technology, which has lost investors one third of their money. Investment decisions are taken by Bob Beckman, the investment analyst who sprang to fame by appearing to predict the 1987 crash. Both small stocks and bio-technology stocks have fallen out of favour in the past year, so it is perhaps not surprising that the fund has performed so badly.

As far as MGM Special Situations Growth is concerned, its 'worst' performance over five years, where investors have lost over half their money, is again a tale of speculating that small companies would do well in the early 1990s.

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