The best and the worst: Unit trusts

ANYONE brave enough to have bought Japan-invested unit trusts at the beginning of last month should have made a comfortable profit.

At the end of last month Japan's Nikkei index rose more than 1,000 points in response to the Government's announcement of an anti-recessionary programme.

One month can give only a snapshot of unit trust performance, however, and over six months the average Japan trust is still showing a loss of nearly 25 per cent, after initial charges.

Stephen Harker, manager of the Prudential Japanese trust, is not making any predictions. 'After what we have been through in the last year,' he says, 'I am not going to make any forecasts.'

His fund has done particularly well, he says, because it has been heavily invested in banks, stockbrokers, utilities and other stocks.

The Govett MIS Japan Bear trust is a futures-linked trust designed to do well when the Japanese market is doing badly. Its mirror image is the MIS Japan Index Fund.

Gold seems to have lost all its old attraction as a safe haven in uncertain times. But the price dropped last month, taking gold shares with it. The FT Gold Mines index fell nearly 15 per cent and is down nearly 40 per cent over six months.

Peter Foster, marketing manager for CU Asset Management, said the CU fund had suffered not only because of this but also because of demands from investors to redeem units. 'If people won't buy gold now, when will they?' he said.

----------------------------------------------------------------- UNIT TRUSTS ----------------------------------------------------------------- The best pounds 1 Prudential Japanese. . . . . . . . . .118.26 2 James Capel Japan Index. . . . . . . .114.51 3 Legal & Gen Japan Index Tracker. . . .114.15 4 Govett MIS Japan Index. . . . . . . . 113.97 5 Morgan Grenfell Japan Tracker. . . . .113.31 The worst 1363 Govett MIS Japan Bear. . . . . . . . 88.58 1364 SGTR Smaller Corporation. . . . . . .88.44 1365 M&G Gold & General. . . . . . . . . .88.36 1366 Mercury Gold & General. . . . . . . .87.62 1367 CU PPT Gold & Commodities. . . . . . 85.49 Value of pounds 100 invested over a period of one month to 1 September, offer-to-offer. ----------------------------------------------------------------- Source: Micropal -----------------------------------------------------------------