Monthly savings plans are an excellent way for investors to go 'bottom fishing' for bargains in emerging markets, according to investment adviser Norman Chan. Mr Chan, associate director for investment research at Allen Perkins Group, recommends single country funds in Southeast Asia, particularly Thailand, or regional funds covering eastern Europe. Thailand is his pick in Southeast Asia due to its strong growth potential and because, unlike other markets in the region, it is still trading far below its pre-crisis levels, around 150 per cent under its level in 1996. Likewise, eastern European markets are among the laggards on the emerging-market scene and still offer bargain prices. 'There is reduced risk through multiple entry points,' Mr Chan said. A lump-sum investor may gamble on buying into a bargain market, only to see it fall further and would then wait years to regain his money, or sell it out with a substantial loss. But monthly savings plans obviate the need to time a market. If it falls further from a low point, an investor picks up more units in his fund for the same monthly contribution to build a bigger war chest for when the market eventually rises. Mr Chan pointed to the example of someone who invested in the Hong Kong market at its peak in early 1994 with the Hang Seng Index at 12,200 points. The market plunged the following year to 7,500 points then peaked again at 16,647 points in 1997 and is now back at 14,000 points, on the rebound from its trough in August last year. If the lump-sum investor had hung on through that period he would only see modest gains today, much less than an investor with a monthly savings plan who would have been able to buy cheap units during the market falls and see their value rise with the market. Mr Chan favours single-country funds for long-term investing as they plumb the depths of a market in its down phase, giving most upside when it turns around. Regional fund managers can cushion the downside by shifting funds between countries. But Mr Chan said that single-country funds were only for those prepared to take on long-term investments of at least three years. One of the best routes into these monthly savings plans is through an independent financial adviser such as Allen Perkins. They act as brokers for products offered by large insurance companies including Royal Sun Alliance, Royal Skandia or Eagle Star. Investors had to be sure they could meet monthly payments for the period they commit to, Mr Chan said. Insurance company plans give investors a choice of 'mirror' funds which track the movements of funds run by the big names in asset management such as Fidelity, Jardine Fleming, Barings and Templeton. Investors should divide their monthly payments among no more than three or four funds, Mr Chan said, but could opt to switch them around should market conditions change. Depending on their age and appetite for risk, investors could opt to put a proportion of their monthly savings into more mature markets and regional funds which offered less upside potential but also less volatility. 'The big thing is to carefully draw up a plan at the start and then stick with it,' he said. Independent advisers can help investors choose from the vast array of funds on offer. Some houses are strong in one area but weak in others. For example, Mr Chan recommended Fidelity's Thailand fund and BT's European fund. For those with a really long-term horizon and a healthy appetite for risk, he pointed to the potential of funds investing in mainland stocks. The red-chip index is now trading at around 1,300 points but 5,000 points was a 'reasonable' target for the gauge in 10 years time.