Funds: "Now's time to buy"

Source: Interview by News on Sunday - Mauritius (www.newsonsunday.com)

Economic slowdown frightens many people, but not Mrs Kay Bower, fund administrator at the Deutsche Bank Offshore in Mauritius. She says it's the right time to invest in funds. Most funds worldwide are presently at a low ebb, in particular after the September 11 attacks in the US. It's good for investors. Returns can be very good for those who view investments as long term.

"Equities always rise over a period of time. For most funds one has to look for at least a five-year plus period...no shorter than that. That's the benchmark. However, the longer the period, the better it is," she says.

Are such investments safe? Mrs Bower explains. Investment is always a risky business. It is fraught with many vicissitudes. "Investors have to be careful and get proper professional advice before deciding where to put their money."

There are hundreds of funds available round the world, and even locally and on the Internet. "The choice is huge, but statistics on how well or bad the funds have performed or are performing are available to compare before taking a decision."

Wait, Mrs Bower warns. Investments in funds are, however, not for people who want to get rich quickly. The risk can be great because "funds can sink dramatically following events such as those in the US recently". These events, or similar events, are unpredictable and can discourage those who are looking for quick returns.

"What is important is to have a time horizon and use collective investment schemes for retirement benefits. For instance, if you look at the growth around the world, the areas which have had tremendous success are things like life insurance. Many are now linked to funds. If you are willing to keep your money in such funds, in unitised security schemes, for 20-30 years, the returns can be very good," Mrs Bower points out.

However, to encourage people to go for such forms of investments, they should be given tax relief and incentives. "Nobody does it voluntarily. For instance, in the UK, the personal equity plan gave certain tax benefits and it's now quite popular. People over there are also more and more turning towards onshore and offshore funds."

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