The Best and the worst: Japanese Unit Trusts

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The Independent Online
INVESTORS who are hoping to take advantage of the much-heralded recovery in Japan should choose a fund that is actively managed, writes Caroline Merrell.

By far the worst-performing funds over five years were those that tracked the Japanese index. The fund managers said this was because the index itself had a much larger weighting towards the banks and financial service companies which were badly hit in the recession.

Invesco's bottom-performing fund does not track the index, but its poor performance may be put down to the fact that it had a bigger than average holding in the banks, both in 1991 and 1993, in anticipation of recovery in the sector. Caroline Bennett, the fund manager, said: 'We are now invested in the cyclical stocks, including mining and machinery.'

Schroder's top-performing fund is actively managed in Tokyo by the investment house's smaller Japanese companies specialist, Ed Merner.

Clive Boothman, managing director of Schroder, said: 'It is quite a volatile fund. You have to go in and stay in for a few years before you start to reap rewards.'

He said that one important factor that has been holding back recovery in Japan over the last few months has been the strength of the yen. This has dampened recovery in exports.

However, Mr Boothman said: 'There is every reason why the Bank of Japan and the US Federal Reserve would want to keep the yen trading within certain limits.'

----------------------------------------------------------------- JAPANESE UNIT TRUSTS ----------------------------------------------------------------- The best pounds 1 Schroder Japanese Sm Cos . . . . . . . . . . . . . 241.06 2 Dunedin Japan Smaller Cos . . . . . . . . . . . . .213.99 3 Perpetual Japanese Growth . . . . . . . . . . . . .203.86 4 NM Japanese Smaller Cos . . . . . . . . . . . . . .179.57 5 Stewart Ivory Japan . . . . . . . . . . . . . . . .160.64 The worst 62 Legal & General Japan Tracking Index . . . . . . . 86.99 63 James Capel Japan Index . . . . . . . . . . . . . .85.94 64 Invesco Japan Performance . . . . . . . . . . . . .83.62 65 Morgan Grenfell Equity Tracker . . . . . . . . . . 82.53 66 Barclays Unicorn Japan & General . . . . . . . . . 72.99 ----------------------------------------------------------------- Figures show five-year return to 1 August 1994. ----------------------------------------------------------------- Source: Micropal -----------------------------------------------------------------

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