THE Hang Seng Index Fund, Hong Kong's first fund to track the performance of the 33 stocks in the Hang Seng Index, should beat the average actively managed unit trust but is likely to fall far short of the top performers, analysis reveals. Over one, three and five years, the index has topped the performance of fund managers in the average managed trust by up to 15 per cent. The better performance has continued so far this year where the index is beating the average fund by nearly 11 per cent. Hang Seng Bank launched the fund last week for those seeking exposure to the performance of the index. But investors who picked top-performing Hong Kong funds any time during the past 10 years have easily outpaced the growth of the index. This year the leaders have posted gains of about 25 per cent - 80 per cent higher then the return from the index. For three years the out-performance is 60 per cent, five years 65 per cent and over 10 years an investor's returns would have more than doubled the index. Alexander Au, vice-chairman and chief executive of Hang Seng Bank, said: 'The new fund will be particularly attractive to the retail investor who is interested in stock investments but does not have sufficient free capital for risk diversification. 'It is also designed for the investor who is confident of a bull market, but is unsure which stocks would benefit from the overall upward trend.' The fund is designed to replicate the performance of the index by creating a portfolio that reflects each constituent stock proportionate to its market value weighting in the index. Funds tracking the major United States indexes are popular among American investors and similar funds replicating the FTSE have been launched in Britain. But according to Cynthia Liu, director of investment services for Jardine Fleming Unit Trusts, there is more scope for managers to outperform in Asian markets. Ms Liu said: 'Active stock picking, management and company visits can add more value here. That is because the market is less efficient, and there are some exploitations to be made.' Bill Tatham, divisional director of Towry Law, added: 'If you are willing to take the risk then you are probably better off going into a well managed fund. 'With such a disparity between shares a good fund manager should be able to follow the money flows.' The fund's minimum investment will be $10,000 with minimum top-ups of $5,000. There is an initial fee of three per cent and an annual 0.75 per cent. The fund will be exclusively available through 56 of the bank's branches. The first day of dealing will be on August 21.