No easy answers to the crisis in the east

Article Abstract:

Asian financial markets have seen stock price drops and falls in currency values. This hits United Kingdom investors with exposure to the region through investment trusts and unit trusts. There is a danger if they sell their holdings that they could sell when the market is bottoming out, yet there is no certainty that prices will rise. There is particular concern over what could occur in Japanese markets. Investors who can afford to wait for a few years may best advised to hang on, while those who need funds within six months may be best advised to sell.

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Tread carefully abroad

Article Abstract:

Investment trusts specializing in smaller firms can benefit from the faster growth rates of these firms, but smaller companies abroad may not perform as well. There may be less information on the firms and families may retain a large stake in the company. Foreign investors tend to focus on larger firms in some economies. Smaller firms can perform well, but the timing of the investment is crucial since the state of the world economy in terms of growth and inflation, and valuations are important.

Analysis, Economic aspects, Small business

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Tiger cubs should be handled with care: this year's recovery in Asian markets is prompting fund managers to renew their promotion of Asian smaller companies as a high-growth investment - but interested investors should tread warily

Article Abstract:

Small companies are associated with higher risks for investors, and those in emerging markets are even more risky. Asian smaller companies are comparatively undervalued, and have underperformed larger companies throughout the 1990s. Guinness Flight has recently launched a new fund to be managed from Hong Kong, investing in quoted smaller companies based mainly in Malaysia, Singapore, Thailand and Hong Kong.

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