Some of the Bank of Bermuda Ltd.'s mutual funds have come out tops when ranked against some of the best in the offshore world in 1997.

The annual Standard & Poor's Micropal Guide to Offshore Investment Funds ranks the bank's Global Manager German Geared as 20th among the 350 top offshore fund performers for 1997. That's the top Bermuda-based fund in the 1997 ranking. The funds are ranked according to their absolute performance returns converted into US dollars.

Global Manager German Geared fund had a return of 72 percent in 1997.

London-based LCF Edmond de Rothschild Fund Management Ltd. is the sub advisor to the bank's Global Manager group of funds.

Other Global Manager funds also had outstanding performances. Global Manager US Geared had a return of 49.48 percent and ranked 41. Global Manager UK Geared had a 1997 return of 49.01 percent and ranked 42. Global Manager US Index, with a return of 26.24 percent ranked 271. Global Manager German Index had a return of 26.18 percent and a rank of 272, while Global Manager UK Index returned 25.51 percent and ranked 293.

The funds' performances continued during the first quarter of 1998. The German Geared sub-fund returned 30.65 percent, the German Index returned 15.23, the UK Geared returned 28.48, the UK Index returned 16.36, the US Geared returned 25.91, and the US Index returned 13.28 during the first quarter.

However the 551-page guide listed the bank's Global Manager US Bear fund as among the 50 "laggards'', or worst performing funds, over the past three years. The US Bear fund fell 21.95 percent in value during 1997, 13.61 percent in 1996 and 22.74 percent in 1995.

"The odd bad patch for a fund, compared with its peers, is understandable, especially if that fund is inherently more risky or conservative in its make-up than those with which it is compared,'' writes the survey's author Robert Milroy. "But there are funds that do have problems and have consistently been poor performers. The "hall of shame list...shows the 50 offshore funds which have found themselves consistently in the bottom quartile of their respective sectors in each of the past three years.'' Mr. Milroy notes that even with the poor performance Global Manger US Bear "is in fact fulfilling its job description'' because bear funds underperform in bull markets.

Mutual funds get nod In a separate comparison of the offshore world's best bear funds in 1997 all five spots were taken up by the Bank of Bermuda's Global Manager bear funds, including the "laggard'' US Bear fund.

The only two with positive returns were, as to be expected, the Hong Kong Bear fund which returned 16.13 percent in 1997, and the Japan Bear which returned 6.62 percent.

Other Bank of Bermuda funds listed in the top 350 were its Bermuda Equity European fund which had a return of 30.14 percent in 1997 and ranked 165. The fund is managed in Bermuda by Patrick Dell. In the first three months of 1998 the fund had a return of 18.73 percent.

The bank's Bermuda Equity North America ranked 185 and had a return of 29.50.

In the first three months of this year the fund had a return of 13.69 percent.

The portfolio manager is Sebastian Dunn.

Bank of Bermuda senior vice president of investment services Wayne Chapman said new funds would be launched later in the year as the bank seeks to widen its product offerings.

"The inclusion of a number of Global Manager and Bermuda equity sub-funds in this year's rankings is a postive sign, but our goal is to improve the performance of all existing funds and also to launch new fund products later in the year,'' he said.

Other funds run out of Bermuda also came in tops in the 1997 rankings. Everest Capital Frontier, returned 49.69 percent and ranked 39 in the list. The fund ranks nine out of ten of the top performing hedge funds for 1997 and second when three year returns are compared. The fund has a three year return of 264.74 percent.

However the fund has since suffered its first setback since it was founded in 1995. In the first quarter of 1998 the fund fell 5.55 percent. Everest Capital International had a return of 28.88 percent and ranked 197 in 1997.

The fund also suffered its first decline in the first quarter of 1998, falling 2.63 percent.

The funds are managed from Bermuda by Everest Capital Inc. whose president and founder is Marko Dimitrijevic. You'll need at least $1 million to invest in Capital Frontier, and $2 million to get into Capital International.

By way of comparison the top performing offshore fund in 1997 is British Virgin Islands-based Thornhill Global Equity which had an astounding return of 403.2 percent. You only need $100,000 to buy into the fund, which was founded in July 1997. Thornhill had a return of 2.99 percent in the first three months of 1998 so might be risky down the line.

"The fund uses a quantitative model, which was designed by its manager, Karlis Sarkans, to pick out the top 15 to 30 best performing emerging markets by examining their market cycles,'' Mr. Milroy stated. "Last year the fund invested in those markets, through equity purchases in telecoms and utilities stocks, for around nine months before moving on to less mature markets.

Winners for Mr. Sarkans last year were the Bahamas, Brazil, Kurdistan, Russia and South African markets.'' The worst performing offshore fund in 1997 was Bermuda-registered Gabelli International Gold Fund B. The fund, which invests in global commodities and natural resources, lost a "resounding'' 81.38 percent during the year. The fund is actually run out of New Jersey.

In the guide Mr. Milroy also notes the increasing trend for mutual funds to list on stock exchanges, such as the Bermuda Stock Exchange. The BSX had 112 investment funds listed at the end of 1997. The Luxembourg stock exchange, with 3,030 listed, had the most out of the seven exchanges compared.

"Although in many cases the listing is to make the fund eligible for pension fund investment portfolios, it is also becoming a useful way for offshore funds to create additional exposure and liquidity for investors,'' Mr. Milroy said.

Among offshore domiciles Bermuda lagged behind the Cayman Islands, and Dublin in attracting mutual funds. At the end of 1997 Bermuda had 991 registered offshore funds, about a 15 percent growth in number from 1996. Meanwhile Cayman had 1,680 funds registered at the end of 1997, a one year growth of 26 percent. Dublin had 1,221 funds at the end of 1997, a growth of 24 percent.

Luxembourg had 4,389 mutual funds, Jersey 1,107, Guernsey 697, and the Isle of Man 168 at the end of 1997.