The best and worst: Pep-qualifying Unit Trusts

Click to follow
The Independent Online
ANYONE who bought a smaller-companies unit trust PEP five years ago is likely to be looking at minimal growth, or even a substantial loss.

However, investors who put pounds 1,000 into one of the top-performing European funds during the same period would have more than doubled their original investment, according to figures compiled by Chase de Vere, an independent adviser

Although their performance has improved over recent months, small-company unit trusts taken out in 1989 have still not recovered from the effects of the recession. Nine out of 10 of the worst-performing qualifying trusts over the past five years were either smaller companies funds or special situations funds, which are also likely to concentrate on smaller companies.

At the top end of the scale, European funds are heavily represented. Five out of 10 of the best-performing unit trusts are from this sector. The top performer, Providence Capitol European, averaged 17.74 per cent a year, against a sector average of 8.58 per cent.

Save & Prosper has the unfortunate distinction of having two of its trusts among the bottom five performers.

Mike Ryder Richardson, S&P's senior marketing manager, says the company underestimated the length of the recession, and ended up with holdings in companies that were too small.

'Since then, we have increased the average size of the capitalisation of our small companies. We also have a new investment team in place, which has introduced a highly rigorous investment methodology,' he says.

----------------------------------------------------------------- PEP-QUALIFYING UNIT TRUSTS ----------------------------------------------------------------- The best pounds 1 Providence Capitol European . . . . . 2,263.91 2 Perpetual High Income . . . . . . . . 2,210.91 3 Schroder UK Enterprise . . . . . . . .2,186.02 4 Morgan Grenfell Europe Growth . . . . 2,130.44 5 Hill Samuel UK Emerging Companies . . 2,051.73 The worst 318 Manulife UK Smaller Companies . . . .1,011.77 319 Save & Prosper Special Situations . . .957.99 320 Save & Prosper UK Smaller Co's . . . . 938.63 321 Allied Dunbar Second Smaller Co's . . .937.46 323 Equitable Special Situations . . . . . 927.06 The table shows the value on 1 September 1994 of pounds 1,000 invested over five years, with income reinvested. ----------------------------------------------------------------- Source: Chase de Vere/September PEP Guide -----------------------------------------------------------------