The best and worst: UK Equity Growth Unit Trusts

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The Independent Online
DEREK Bawden, the manager of MGM's special situation trust, puts his problems down to the plight of smaller companies.

The fund - like so many others - has suffered from a net outflow of funds as unit holders vote with their feet. This forces the manager to sell; and to sell the liquid investments leaves the less saleable funds behind, causing a downward spiral of poor performance and forced sales.

But the fund is now back on course, with two thirds of the funds in top 200 UK companies, says Mr Bawden.

'It's very embarrassing, but we are actively managing the fund and it is doing a little better now. We have a net inflow of funds, and the last few months haven't been too bad.' The fund, however, is still showing a loss of 17 per cent over the period and is ranked 138th of 148 funds.

AIB Grofund Equity has had a consistently high ranking. But although it has been 10th out of 151 funds over the last month, investors have lost 4.2 per cent before taking the bid/offer spread into account.

John Rocket, the fund manager, said it holds just 30 to 40 of the largest stocks at a time. 'We have been good at avoiding bad companies in the fund, even though some of the largest companies, like Polly Peck and British & Commonwealth, have fallen apart. Our choice of sectors has been prudent in these volatile markets.'

-------------------------------------------------------------------- The best (pounds) 1 AIB Grofund Equity 122.37 2 Gartmore British Growth 115.91 3 Eagle Star Environmental Oppt 112.49 4 Capability Growth 112.23 5 Pembroke 110.55 The worst 127 Arkwright Recovery 53.66 128 Midland Capital 53.42 129 Guinness Flight Recovery 51.13 130 Brown Shipley Recovery 35.65 131 MGM Special Sits Growth 28.90 -------------------------------------------------------------------- Value of pounds 100 invested for three years to 1 August 1992 net income reinvested. Source: Micropal --------------------------------------------------------------------