The best and worst: Far east unit trusts, excluding Japan

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The Independent Online
SOMEONE investing pounds 100 in Korea a year ago through a specialist unit trust would have seen that money grow by anything from 7 to 60 per cent, depending on the fund.

According to Micropal, the independent research organisation, pounds 100 invested in Baring's Korea unit trust this time last year is now worth pounds 164.13; the same amount invested in Schroder's Seoul trust is worth pounds 107.23.

Charles Porter, director of Barings mutual funds division, credited his company's long experience in Korea for its success.' We were probably one of the first in this market in 1981,' he said.

At the other end of the scale, investment managers blame the poor growth of their funds on falling foul of Korea's two-tier share system. Foreign holdings of some stocks are strictly controlled by the government, which means they can trade at a substantial premium compared with local market stocks.

Clive Boothman, managing director of Schroder Unit Trusts, accepts that his fund manager got it wrong, but said it was for the right reasons. 'He was unhappy about choosing premium stocks and has, therefore, invested more in local market stocks which have no premium.'

At some stage, the Korean market is expected to liberalise, which may leave some fund managers holding over- priced stocks, Boothman added. He also said the fund had been over-reliant on shares in small companies.

Mike Ryder Richardson, marketing manager at Save & Prosper, told a similar story. However, both Schroder and S&P insisted that they had no plans to change their investment strategy in Korea.

--------------------------------------------------------- FAR EAST UNIT TRUSTS, EXCLUDING JAPAN --------------------------------------------------------- The best pounds 1 Providence Capitol Thailand 164.13 2 Baring Korea 161.14 3 GT Korean Securities 136.60 4 Providence Capitol Emerging Asia 135.03 5 Fidelity ASEAN 132.26 The worst 55 Providence Capitol CAM Pacific 109.58 56 Save & Prosper Korea 108.57 57 Baillie Gifford Pacific 108.39 58 Schroder Seoul 107.23 59 Thornton Little Dragons 106.91 --------------------------------------------------------- The table shows the value on 1 October 1994 of pounds 100 invested a year earlier, with income reinvested. --------------------------------------------------------- Source: Micropal ---------------------------------------------------------