Best and worst: Unit trusts

THE dangers of a fund being exposed to only one country are graphically illustrated by the poor performance of Thornton's Iberian Unit Trust.

The fund is almost entirely invested in Spanish companies, with a small proportion in Portugal. Nick Hodgson, Thornton director, said: 'The market has had a very poor recent performance. 'Single- market trusts tend to be much more volatile. Sometimes they are going to perform very badly, and sometimes they are going to perform very well.'

He said that the fund had been hit by the country's continuing political turmoil. He added: 'Spanish interest rates still have some way to come down.' William McLucas, managing director at Waverley Unit Trust Management, does not think that the performance of the Canadian fund was held back by being invested in only one market: 'We just got the management of the fund totally wrong.

'We put it all in blue-chip stocks anticipating that this would lead the recovery. In fact, it was the gold stocks and mining companies - wildly speculative stocks - that performed well,' Mr McLucas commented.

Hong Kong continues to be the main influence on the top performing funds over five years.

Bruce Seton, Gartmore director, said its fund had done exceptionally well because it had moved straight into blue-chip shares after the Tiananmen Square massacre and had been fully invested afterwards.

------------------------------------------------------------------------ UNIT TRUSTS ------------------------------------------------------------------------ The best % 1 Gartmore Hong Kong 346.07 2 Invesco Hong Kong & China 253.22 3 Prov Capital Hong Kong 244.08 4 James Capel Hong Kong Growth 231.03 5 Abbey Asian Pacific 215.41 The worst 955 S&P Special Situations -17.57 956 Thorton Iberian Growth -22.25 957 Barclays Unicorn Japan & General -29.24 958 Waverley Canadian Balanced Growth -40.21 959 MGM Special Situations Growth -51.31 ------------------------------------------------------------------------