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IFAs&#39 mutual friends

Investec Guinness Flight&#39s Asia New Economy Fund is aiming for growth by

investing in Asian companies involved in technology and the internet.

The panel agree that the investment strategy is good. Fairhall says: “It

is a good strategy that combines companies presently benefiting from the

new economy and those with future potential.”

Martin says: “It is good to see a better split between hardware and

software versus traditional internet activities so that the former has a

larger percentage allocation.”

Briggs believes the fund is “well-diversified across different sectors.”

Hawksworth points out the combination of technology stocks and the Asian

economy will result in high volatility. He says: “The companies the fund is

looking to invest in would appear to give the fund a good spread of sectors

although there is a fairly strong leaning to technology stocks, which,

coupled with the Asian economies, will heighten volatility.”

The panel hold similar views on the type of client the fund is most

suitable for. Martin identifies the “more sophisticated investor who does

not mind seeing his investment go on a financial merry-go-round.”

Fairhall says: “This is a long-term growth opportunity. Clients investing

in the fund will need to be able to ride periods of significant


Hawksworth refers to “experienced investors looking to increase the risk

profile of a reasonable-sized investment portfolio.”

Briggs asserts the fund is “not for the faint-hearted.”

Moving on to the fund&#39s suitability to the market, Hawksworth says it is

“another opportunity for investors to experience the thrill of investing in

technology, the Far East and emerging markets in one fund.”

Briggs and Martin offer mixed responses. Briggs says: “It is good timing

to catch the economic cycle but bad timing to launch a technology-based

fund. Investors are very wary right now.”

Martin believes the technology fund market is getting crowded but feels

the fund is a welcome addition to thesector. Fairhall also feels it is a

useful addition to the market. He says the specific Asian focus provides a

new opportunity for investors.

When asked to commenton marketing opportunities, Hawksworth suggests they

are limited “to investors with an existing balanced portfolio” and “not for

the faint-hearted”.

Fairhall says: “Investors are always looking to invest in areas of

potential growth and outperformance.” He believes investors who have

enjoyed investment growth from the US economy are likely to sense the

potential of this fund.

Martin says: “With the recent US-China open trade agreement, this product

appears to be launched at an opportune time.”

Turning to useful features and strong points, the Asian focus scores

highly. Martin says: “The geographical diversity of the area should offer

ample opportunity for this type of investment.”

Briggs mentions “exposure to new economies throughthe Far East”.

Hawksworth suggests the fund is “an opportunity for the most adventurous

investor to invest in what will no doubt be an exciting area.”

Fairhall feels the company name, experienced fundmanagement team and sole

focus on Asia are the fund&#39s main strengths.

But when asked to discuss the disadvantages of the fund, Fairhall believes

the Asian focus could become negative in certain conditions. “Being focused

on Asia can be a disadvantage if worldwide stock markets become volatile.

The new economy will have successes and failures. Picking the winners will

always be a difficult task,” he says.

The other panel mem-bers are united in their viewthat the fund&#39s

denominationin dollars is a weakness. Martin highlights the exchange rate

costs of buyingdollars. Hawksworth says: “Being dollar-denominated, there

will be additional currency fluctuation rise as well as the investment


Briggs adds that the fund is not Isa-eligible as it is denominated in dollars.

The panel agree Investec Guinness Flight&#39s reputation is good. Hawksworth

says: “Guinness Flight has a good reputation within the industry but is not

considered to bea household name with investors.”

That view is echoed by Martin, who feels the company is a “niche player

for more sophisticated investors”.

According to Briggs, Investec are a “highly respected investment

institution.” Fairhall adds that the good reputation is justified by some

good performances.

The panel&#39s response to the company&#39s past performance is mixed. Briggs

says: “Many funds enjoy low ratings or mediocre performances. The Asian

smaller companies fund is a dog, hopefully the new economy fund will do


Hawksworth is less critical. He says: ” The majority of their funds have

performed reasonably well, although their equity global emerging markets

fund has not performed particularly well over the last two years. The

long-term performance is acceptable.”

Martin agrees the company has had some average performances but suggests

Asia and the Far East are its forte. Fairhall feels Investec&#39s past

performance is “good”.

On the whole, the panel consider established technology funds will provide

the main competition.

Briggs goes for Far East sector leaders, including Henderson and Fleming.

He also believes the Investec Guinness Flight Hong Kong & China fund looks


Martin is more specific, singling out the Edinburgh Asian smaller

companies fund and the Henderson Pacific smaller companies fund as likely

competitors. Hawksworth mentions Fidelity&#39s South-east Asia fund.

Fairhall says: “Few funds will currently compete directly with the fund

but Investec will continue to look to funds offering exposure to US

companies as well as Asian companies.”

The product literature is generally well received by the panel. Hawksworth

says: “The literature supplied was of good quality, well laid out and easy

to read.”

Martin points out the literature is “well-observed and the information is

concise.” Briggs found it “striking and colourful” while Fairhall thought

it was well presented.

Commission is regarded as standard and in line with the market although

Briggs feels it would be nice to have some trail commission.

The panel also agree the charges are fair and reasonable in the market

context, with Hawksworth pointing out they are “in line with the majority

of funds of this type.”

Summing up, Martin follows up his earlier views about the company. He

says: “Apart from the New Wired Index Fund, their other portfoliosare not

well known.”

Donald Martin, Partner, MacLeod IFAs

Robert Briggs, Principal, Robert Briggs

Stephen Fairhall, Director, RBC(UK)

Stuart Hawksworth, Director, Townends Financial Consultants


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