QROPS Advice: Investment News: STANDING ON THE SHOULDERS OF GIANTS

Although BRIC (Brazil, Russia, India, China) funds have been in vogue over the past few years, Ashburton prefers to focus on what it describes as 'the two giants' and their growth prospects with its Chindia Fund - launched in December 2006.
"These two investment areas complement each other because there is little competition between China and India," says Jonathan Scheissl, fund manager of the Ashburton Chindia Equity Fund. "India is predominantly a service economy while China is focused on manufacturing."
And, while the Chinese economy is more advanced than that of India, the Indian stock market is much older and more effective at capturing the growth of its underlying economy. MSCI China, by contrast, does not yet capture a lot of the underlying growth in this economy.
The International Monetary Fund (IMF) estimates that Chinese gross domestic profit (GDP) will grow 9 per cent in 2010, while India is projected to grow 6.4 per cent. Brazil is set to grow 3.5 per cent and Russia should grow 1.5 per cent.
Mr Schiessl points to the fact that while over the past 10 years the MSCI World Index has not delivered much growth, MSCI Asia ex-Japan is up around 100 per cent.
Strong growth areas in China not captured by MSCI China include infrastructure, fixed assets and consumption. But Mr Schiessl says this is set to change, for example, consumer-facing companies such as department stores can now list at a premium, which should encourage more of them to do this.
He adds that funds can already get better exposure to underlying Chinese GDP growth, for example, by purchasing Hong Kong-listed Chinese companies which better represent the domestic market. These accounted for 46 per cent of Ashburton Chindia's assets at the end of November.
by: Leonora Walters