Escort's Income Fund Rated Asia's Best

Did you know that one Indian mutual fund scheme -- Escorts Income Bond -- was Asia''s best individual performer in calendar year 2002 with a blistering return of 102.8 per cent?
What makes its performance more impressive is the fact that the Sensex managed to only post a meagre 4 per cent gain in 2002. The Escorts scheme, launched in October 1996, invests in a well-diversified portfolio of fixed income securities with moderate risk. It also has limited exposure to equity and money market instruments.
According to data from Lipper, a fund tracking firm, out of 15 geographic sectors in Asia, the performance of India-focused funds have been impressive. Lipper said India-focused funds came third among the rest of the Asian funds -- gaining a return of 13.9 per cent. Mutual fund investors in Asia got the best returns from Indonesia in 2002 with an average gain of 37.9 per cent, while funds investing in Thailand came second, handing year-on-year returns of 19.7 per cent. With Indian funds now allowed to invest in overseas stocks and bonds, investors may well insist that their fund managers focus on Indonesia and Thailand.
But, before you go all out for Indonesia, read what the experts have to say. A foreign fund manager said, "Indonesia was a surprise in 2002. It (the Indonesian market) was coming from a low base and assets were cheap. Therefore, it will be
difficult to repeat the performance in 2003."
According to foreign analysts, funds investing in India were among those who are likely to outperform in 2003. They said foreign funds, attracted by the low valuation of Indian equities and strong growth potential, have been increasing their exposure to the local market in recent months.
"Its growth profile remains intact, returns are healthy, and valuation is still one of the most compelling in the region," Merrill Lynch said in a recent research note.
India shared the potential of being an outperformer with Thailand, South Korea, and Hong Kong-listed China firms.
Meanwhile, Philippine focused funds were the region''s worst performers during the year; the biggest sectoral losses of 18.8 per cent were carried by these funds. Funds invested in Taiwan were next in this list with a loss of 13.5 per cent during 2002.
The Lipper data showed that only six out of the 15 sectors -- Indonesia, Thailand, India, South Korea, Malaysia and funds investing in ASEAN (Association
of South East Asian Nations) -- offered positive returns to mutual fund investors in 2002. On a broader regional level, funds investing in Asia outside of Japan lost 5.9 per cent on an average in 2002.