Stock markets have taken a beating during the past year and many investors are nursing their wounds wondering how they can regain their losses. From March till September 2009 there has been an amazing recovery in U.S. and in Europe of about half of the stock market reversals seen in 2008.

 

But there is no guarantee that the recession is over. At least one major correction is likely in US and Euorpean Stokmarkets and the likelihood is that it will be 5 to 10 years before these markets return to anything like 'normal'.  We believe it will be some time before we can recommend invetsment in these markets. The economy of the USA is in a parlous state and the risk of default on debts by many European countries is high.  

 

However, Non U.S. and Non Europe stockmarkets are in very different situations. The medium and long term outlook for stocks in many 'emerging' markets is very good. In paricular, China, India, Russia, Chile, Indonesia and others have had strong growth and should continue that way.

 

It is prudent, therefore, for a significant part of any expatriate's capital to be held in an area of low or zero risk.  With interest rates at record low levels, holding cash on deposit is not very attractive.
 
A solution is to invest partly in Protected Funds.  With these there is exposure to potentially strong growth areas but should the underlying investments lose value, then return of the invested capital is independently guaranteed.

 

Secured funds are normally but not always, open for investment for a limited period and have a fixed term of investment most often in the 1 to 10 years range.
 
Care is needed in the selection of Protected Funds. They vary greatly. Many are excellent, some are not all they seem.  In the recent past, many people lost heavily through so-called ’precipice’ bonds which they had thought were guaranteed against loss.

 

For exposure to Asian Growth we recommend Manor Park Hong Kong Security Fund. This combines the potential of China/Asia growth with a 100% guarantee to your capital