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Funds show first fall since 1994

The average performance of UK unit trusts fell by 3.29 per cent last year, the first fall since 1994, according to the Lipper UK Unit Trust/Oeic Year End Round Up.

Despite the fall, the UK still outperformed other regions partly due to its large and successful financial services sector UK funds.

But Lipper says the outlook is comparatively good for financial services and the UK in general 2001.

Overall, UK focused-funds declined in 2000 with the largest sector, UK all companies, dropping by 4.85 per cent. This is again the first drop since 1994. However, a relatively small number of technology stocks, 4.4 per cent of UK all companies funds and a higher proportion of financial companies, 23.3 per cent, meant the UK did better than the US, Japan, Latin America and sma ller Pacific markets.

The UK equity income sector, the only UK equity sector to show positive returns, was up by 2.27 per cent. High weightings in financials, 26.6 per cent of equity funds, and a smaller representation of tel ecommunications funds contributed to this. Asian funds, in particular Japan, were the worst performing in 2000. The Far East including Japan declined by 23.919 per cent Lipper global marketing director Steve Lipper says: “Looking to 2001, the US and Japan are the toughest to predict as they are teetering on or are in recession. Europe is in the best shape economically.

“The UK is not a very technology-focused market which is one reason for it doing well in 2000. The outlook for financial services in particular is good and this sector is suited to the UK&#39s flat to declining interest rate.”


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