Latin American funds were the best performers in the first half of the year, with a return of more than 22 per cent, according to the Hong Kong Investment Funds Association. Hong Kong equity sector funds returned a respectable 12.5 per cent, behind a number of sectors including commodities, selected European funds, derivative-linked investments, Asian single country fund sector and Malaysian funds. Association spokesman Seetoh Lin Yoke said: 'If one looks at the second half of 1995, Latin American funds were consistently one of the five worst performing sectors.' A reason for the sharp turnaround in the fortunes of funds in the sector is because economic and political reforms in the region have boosted investor confidence. 'This has attracted much inflow of foreign capital, which helped boost the markets,' Ms Seetoh said. The highest annual returns came from Japanese warrants, which have come first for five consecutive months. At the end of last month the annual return was 103 per cent, four times that of Australasian equities, the second best sector. Hong Kong funds returned 23.6 per cent over the same period, putting the sector in fifth place. From a regional standpoint, in the year to June investors would have done best in regional funds including Japan, which rose 10 per cent. For the year-to-date, investors should have been in Asian funds excluding Japan and Hong Kong. The only sectors to lose money in the year to June were Thai equities, down 3 per cent, and South Korean equities, off 8 per cent. For the six months to June, Korean funds were the only losers, with a loss of about 7 per cent.