A STEADY stream of expatriate investors who have bought flats in the past two years are cashing in after making spectacular gains, a financial adviser says. Towry Law division director William Tatham said many flat owners were bailing out of the property market after in some cases doubling their money. The investors, mostly expatriates, now wanted to invest the proceeds in a safe financial portfolio. 'These flat owners were in the right place at the right time and most have the pragmatic view that opportunities like this don't happen very often,' Mr Tatham said. 'They've made a good profit and want to explore ways of securing their windfall.' Mr Tatham has put together an investment plan to cater for such clients, most of whom have about $5 million to invest. The end result is not racy but it ensures that money made on the sale of a flat grows faster than inflation. The typical portfolio consists of three investment strategies: protected, defensive and growth. The amount invested in each area varies depending how much risk the client is willing to take. But for those whose primary aim is to preserve their windfall and to make a small profit over inflation, the allocation should be 35 per cent in the protected strategy, 40 per cent in defensive and 25 per cent in growth. The protected strategy combines cash and managed currency funds as well as a guaranteed investment. Although returns on money funds are not spectacular, often about eight per cent a year, Mr Tatham said they were an important part of the portfolio. 'A well managed currency fund will pay a higher return than a bank deposit and represents cash that can be accessed on short notice, unlike other parts of the portfolio,' he said. Guaranteed investments ensure the principal invested and the annual interest earned. For this, Mr Tatham recommends the Clerical Medical International (CMI) Wealth Builder Plan, taken over five years, which invests in currency, bonds, stocks and shares. If you had invested US$100,000 (HK$773,000) in this fund in 1988, its first year of operation, your investment less costs would be worth $179,000 today. Returns from the portfolio's largest element, the defensive strategy, should range between 10 and 12 per cent. This is designed to beat Hong Kong's current inflation rate of 8.3 per cent with minimum risk. It consists of one or two discretionary portfolios and includes a mixture of shares and stocks, bonds and currencies, with an international spread. 'Currency is important in this part of the overall portfolio because investors need to be able to switch to another currency service when conditions are favourable,' said Mr Tatham. He recommends the Gartmore Capital Management Strategy, a discretionary service run by the Jersey-based Gartmore Fund Management International that invests globally. Gartmore was selected by Mr Tatham because it has a defensive strategy. 'At the first sign of trouble, the fund manager will move part of the portfolio into cash,' he said. 'Other good discretionary services are available from Fidelity Investments, Guinness Flight and Mercury Asset Management.' Growth strategy makes up the smallest part of the portfolio and consists of funds selected for their performance, which should be in the 12 to 15 per cent range. This would include funds investing in the Far East as well as global emerging market funds, which would provide exposure in India and in Latin American countries.