There are a number of quality country funds available focused on Egypt. They include Egypt Investment Company, managed by Concord National in New York, Egypt Trust by Lazards Freres in Cairo and Nile Growth Company, managed by Alliance Capital's David Edgely out of Istanbul. There are also two open-ended funds, Egypt Fund, managed by Hermes in Cairo and Egyptian Growth Investment Company, by Concord National.

The domestic mutual fund industry developed on the back of the 1994-95 IPO boom.

The Hermes Egypt Fund is Dublin-domiciled and is described as quasi-open-ended, with subscriptions and redemptions being authorised on a quarterly basis. Manager Aladdin Saba favours fundamental analysis with a particular bias towards price/earnings and earnings per share growth estimates. Using quant techniques, he is a strong advocate of the merits of asset allocation and determination of the asset class mix.

None of the funds has a long track record, but this fund was the best performer for 1997, returning 36% against a sector average of 29.5% and an index benchmark of 19.3%. The fund has also benefited from having Martin Currie's Tristan Clube as adviser.

Edgeley at Alliance Capital says research and local knowledge are the keys to successful investment in Egypt. The management is ultimately carried out by the team of 50 investment professionals at CIIC in Cairo who carry out company visits and maintain a proprietary database. The main criteria for inclusion of a stock is good relative value but sector themes will be flowed where appropriate.

The Luxembourg-domiciled Nile Growth Fund was launched in 1997. It is heavily involved in private equity fund management. Richard Newell