Hong Kong unit trusts struggle to better regional index gains

MOST Hong Kong authorised unit trusts investing in regional economies failed to out-perform their benchmark indexes, a review of performance by Micropal, the statistics company, reveals.

Fewer than half the funds investing in the Hang Seng Index - some with exposure to China stocks - failed to replicate its 20 per cent-plus gains.

An investor who placed US$1,000 in the top-performing fund, HSBC Hong Kong Equity, would have seen holdings grow to more than $1,312.

The top eight funds in the 19-strong sector produced returns of more than 20 per cent. The worst-performing fund, Dao Heng Hong Kong, lost $12, while Schroders Asia Hong Kong Smaller Companies struggled to do little more than break even.

The remaining bottom five all struggled to achieve less than half the index return.

The performance of funds covering Indonesia, Thailand, Korea, the Philippines and the sub-continent was dismal. Of these 34 funds, only three made a profit.

The star performer was Lippo Indonesian Growth, which produced a return of nearly $300 for an investor who made a $1,000 outlay.

This compared to a return of just over 9 per cent for the Jakarta Stock Price Index.

Thornton's New Tiger Thailand returned just over 10 per cent against the index loss of nearly 7 per cent.

Fidelity Investment's Thailand fund returned $28.

The worst performer, Jardine Fleming Pakistan Trust, lost investors more than 55 per cent of their capital.