Italy: Offshore takes prizes
The Italian stock market has been buoyed by waning doubts about Italy's ability to meet the Maastricht criteria for a single currency.
Inflation, at less than 2%, has touched a 29-year low and the general macroeconomic outlook has shown improvement. Less positive, perhaps, has been GDP growth which is estimated to slow to less than 1% in 1997, and interest rates where the previously downward trend was halted earlier this year.
The small, but growing, number of domestic Italian equity funds performed well in this scenario with the average fund gaining almost 12% over the year to 1 August. Topping the table was the Torino-based Istituto Bancario di San Paolo's Azioni fund, which returned nearly 27%, some way ahead of second-placed Venetoblue.
Average returns, at almost 14%, were higher in the specialist equity sector, which consists largely of the increasingly popular funds-of-funds vehicles. Top performer here was the Indice fund from Milan-based Cisalpino group, in which the US' Putnam Investments has a stake.
Returns on domestic funds were made to look meagre, however, when compared to those of the small range of offshore funds investing in the Italian equity market. Largely due to currency factors, rather than any greater stockpicking expertise, the average offshore fund did roughly twice as well over the period.