The Best and Worst: Gold funds in better health

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The Independent Online
PRESIDENT Clinton's review of the US health-care system has cast a pall over shares in companies involved in the industry, according to Antony Milford, manager of the Framlington Health Fund.

Investors have taken fright over how spending on health might be affected by any reforms, Mr Milford says, and this has hit the share price of practically every health-care- related company, from hospital groups to drug companies. He expects the uncertainty to continue at least until May, when the results of the review are to be announced, but believes the panic will prove largely to be unjustified.

Another problem for the Framlington health trust - until recently a spectacular performer - has been weakness in the share prices of specialist medical technology companies, for lack of an important new product. Long- term, however, the health-care and biotechnology sector must benefit, Mr Milford says.

Shares in gold and commodity companies have spent years in the wilderness but recent activity has brought some good news for long-suffering buyers of unit trusts that are invested in the sector.

Julian Baring, manager of Mercury's gold trust, believes shares in gold-mining companies are beginning to reflect the latent potential demand for gold from the increasingly better-off population of China.

It is no coincidence, he argues, that the top spots in the unit trust performance tables are shared between gold funds and funds invested in Hong Kong and China.

Nick Hodgson, head of UK sales and marketing at Thornton Unit Managers, says the shares also reflect the scent of recovery in the US economy, and with it the possibility of higher commodity prices.

------------------------------------------------------------------- BEST AND WORST UNIT TRUSTS ------------------------------------------------------------------- The best pounds 1 Mercury Gold & General 124.44 2 Waverley Australasian Gold 120.79 3 Thornton Gold & Natural Resources 120.08 4 Invesco Hong Kong & China 118.89 5 James Capel Hong Kong Growth 117.80 The worst 1383 Govett MIS European Bear 96.30 1384 Beckman Bio-Tech 95.65 1385 Govett MIS Dollar Bear 95.34 1386 Hill Samuel US Smaller Co's 92.53 1387 Framlington Health 88.56 ------------------------------------------------------------------- Value of pounds 100, invested over one month to 1 March, offer-to- offer Source: Micropal -------------------------------------------------------------------