Asian Experts Recommend Offshore Unit Linked Vehicles

by Carla Johnson, Investors Offshore.com

11 October 2001

According to a recent report in the Bangkok Post, many Asian financial advisors are looking to offshore unit linked financial vehicles as the best way to maximise returns in the current uncertain climate.

Experts suggest that this is the most effective strategy at the moment due to a combination of factors, although the most important are that units in such plans may be assigned to underlying funds managed by some of the world's best money managers, a tactic which favours growth, and that the history of markets, both in the medium and long terms, shows that equities outperform both inflation and cash deposit rates. Offshore plans usually mean that the funds are both unencumbered by withholding tax, and paid out free of withholding tax.

Andrew Leppard, MD of Barclay Spencer International, a Bangkok based consultancy, confirmed this: 'Making regular contributions to a unit-linked offshore savings plan enables you to be in the market when it really matters, and also gives you the advantage of unit cost averaging,' he observed.

A recent study conducted by international fund manager, Fidelity, showed that 'being in the market when it matters' is a very important factor in any investment. Fidelity found that by being out of the market for the best 40 days in 13 years (which only amounts to around three days per year), returns were very dramatically reduced.

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