UNIT TRUSTS investing predominantly in Japan have outperformed during the last four months of worldwide market turmoil, despite the country's own political crisis, writes Caroline Merrell.

However, short-term gains should be seen against poor long-term performance. For example, pounds 100 invested in Hill Samuel's Japanese Technology Trust five years ago would now be worth about pounds 136.

Bridget Cleverly, Schroder's assistant director, said: 'The funds have been helped by two factors: the yen has strengthened against sterling, but perhaps more importantly, the recession in Japan is beginning to bottom out.'

The unit trusts that have tumbled furthest in the four months are invested in Hong Kong. Fund managers believe that the market has much further to fall. The Hang Seng Index now stands more than 400 points off its peak.

Ashok Shah, Providence Capitol's senior portfolio manager, said: 'Our fund has performed no worse than the index. It had a massive rally in the fourth quarter of last year.'

One hundred pounds invested five years ago in Providence Capitol's fund would now be worth pounds 315.