Five experts select their fund winners

WITH so many unit trust funds available, investors may find choosing a suitable fund confusing and complicated. As a guide, the Independent on Sunday asked five leading independent investment advisers where they would invest their money.

Peter Hargreaves,

Hargreaves Lansdown

"I'd choose the Schroder Pacific Growth unit trust. The smaller emerging markets of the Far East have been out of favour for more than two years. But the GDPs of these countries is on average 9 per cent - three times that of the UK - and the stock markets are much cheaper than the UK stock market. The emerging markets' currencies are linked to the US$, which is currently looking stronger than it has for a long time. We also rate the fund's manager, Maggie Lee."

Pacific Growth

Fund manager: Schroders

Initial charge: 5.2%

Annual charge: 1.25%

Total return over 1 year: 16%

Total return over 3 years: 103%

Total return over 5 years: 272%

Investment strategy: to invest in South-east Asian companies, excluding those in Japan, which can provide sustained growth over the long term.

Chris Wicks,

Kidsons Impey Scott Lang

"My favourite unit trust for 1996 is the Govett UK Safeguard fund. It uses options to guarantee that if the stock market goes down, it will only fall by 2 per cent. But if the stock market goes up, so does the fund. The market is expensive at the moment and could have a correction soon. As a large percentage of investors' funds are normally exposed to the UK, with this fund you can hedge your bets."

UK Safeguard

Fund manager: John Govett

Initial charge: 5.5%

Annual charge: 1%

Total return over 1 year: 20.3%

Total return over 3 years: N/A

Total return over 5 years: N/A

Investment strategy: to outperform the FT-SE 100 index if it goes up, and to limit any fall to a maximum of 2 per cent if the FT-SE goes down over any three-month period.

Graham Hooper,

Chase de Vere Investments

"I'd go for the Morgan Grenfell European Growth fund. It has outstanding past performance, and as it's a European fund, it will give some diversification to most investors' portfolios. The fund managers invest according to their beliefs, and don't just structure their portfolios in proportion to the size of the various markets."

European Growth

Fund manager: Morgan Grenfell

Initial charge: 5.25%

Annual charge: 1.5%

Total return over 1 year: 35%

Total return over 3 years: 211%

Total return over 5 years: 308%

Investment strategy: valuations look most attractive in the peripheral markets, particularly Finland. The fund will remain over-invested in these areas with a lower exposure to consumer, oil and financial stocks. It will continue its over-weighting in high-growth industries where there is scope for revaluation.

Amanda Davidson,

Holden Meehan

"I like Schroder Global Emerging Markets fund. It will probably fluctuate like mad in value, and it's not an investment for widows and orphans, but it should come right over the longer term. 1994 and 1995 have been really hard years for emerging markets, so they should come good soon."

Global Emerging Markets

Fund manager: Schroders

Initial charge: 5.25%

Annual charge: 1.5%

Total return over 1 year: 4%

Total return over 3 years: N/A

Total return over 5 years: N/A

Investment strategy: to invest in companies in Latin America, Eastern Europe, the Middle East, Africa, and South-east Asia which can give sustained growth. The fund manager is prepared to pay a premium price for good company management in these countries, where buying and selling of shares can be difficult and time-consuming.

Paul Boni,

Berry Birch & Noble

"We like Japan and the Far East. Fidelity South East Asia, which is managed by Peter Phillips in Hong Kong, has been a consistent top performer. Apart from one period of three years, it has always been in the top quarter of funds in the sector."

South East Asia

Fund manager: Fidelity

Initial charge: 3%

Annual charge: 1.5%

Total return over 1 year: 23%

Total return over 3 years: 85%

Total return over 5 years: 248%

Investment strategy: to give long-term growth from stocks and shares of companies in the Pacific Basin, except for Japan. Most of the portfolio will consist of large company shares, but it may also invest in smaller firms.