Coke is it? Not today, thanks

Under the spotlight/JOHNSON FRY

Andrew Verity
Friday 07 November 1997 19:02 EST
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The product: Johnson Fry's Global Growth Unit Trust.

The deal: Customers invest at least pounds 1,000 with Johnson Fry. This is then invested around the world in established multi-national companies that are not quoted on the UK stock market. The idea is that customers who invest in well-known brands such as Coca-Cola can cash in on growing markets in Latin America, Eastern Europe or China.

Plus points: Johnson Fry has shown its ability to produce good investment returns by investing in companies that have strong potential for growth. Two of its UK funds have topped performance tables over one year and two years. A further fund, the Slater Growth Trust, has topped tables over one, two, three, four, and five-year periods. The company will take 2 per cent off its normal initial charge of 5 per cent if you invest before 28 November.

Drawbacks and risks: The timing is diabolical. Who wants to invest in Latin America or Eastern Europe when, just last week, their stock markets showed their ability to plunge harder and recover slower than those in London and New York? There may be further falls to come. Johnson Fry's fund management expertise has been almost purely in the UK, where it conducts its own research. This time it will buy all its data from other investment houses. So it is hard to see why the company should pick better investments than other managers. Blue-chip stocks such as Coca-Cola are well-known and safe but very expensive. Publicising the fund, Johnson Fry conveniently omits a chunky annual management fee of 1.5 per cent.

Verdict: Nice firm, shame about the fund.

Marks out of five: Two.

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