Dian's Column
Dian's Archive

Lavine/Liberman Archive




Lipper
Muriel Siebert & Co.


EMERGING GROWTH AND FUND TIDBITS



Folks have been anticipating it for years, and now, those micro-, small- and mid-cap stock funds are beginning to turn around.

It took longer than some would have probably liked, but, during the second quarter of this year stocks the make up the Russell 2000, a small and mid- cap universe, outperformed those of the big company, S & P 500.

A. Michael Lipper, chairman of Lipper Inc., forecasted last fall: "There's going to come a time in the not so distant future when S & P 500 funds won't be outperforming all other fund types."

And he was right.

What does that mean to large-cap fans? Just because the S & P 500 funds aren't holding top-performance seats these days, is no reason to dump them. Through July 22, this group's performance was up over 11 percent. That's over 2 percentage points ahead of how the average small-cap fund performed over the same time period; about a half of one percentage point shy of the performance of the average mid-cap fund; and half as good as the average micro-cap fund's performance--it was up 22. 49 percent.

Jim Callinan is portfolio manager of Robertson Stephens Emerging Growth Fund.(800-766-3863), an aggressive small-and mid-cap fund with a solid long-term record and an impressive short-term one, too: Through July 27, the fund was up 49.11 percent.

Callinan knows all too well about the volatility ---and rewards ---of emerging market stocks.

"If I were an investor who didn't want any volatility, I might buy an index fund. Or some value fund with a big component of bonds in it, " he says." But for that portion of money one can take risk with, this is the perfect vehicle because what we do when there is extreme volatility is to buy great companies at really attractive prices."

With about 150 stocks in the fund, and about half of the fund's assets invested in tech companies, shareholders in a fund need to not mind market swings, have long-term investment goals and not be tax-sensitive.

Plus, it's best if they understand that creating a diversified portfolio of funds, i.e., one that includes say large and small-cap funds, can be as rewarding to them as creating a diversified portfolio holdings of securities is to a fund manager.

Like the idea of not paying a sales charge, i.e. load, on a socially responsible fund? Then here's a deal for you. From now up to September 7, 1999, the 2.5 percent sale charge is being waived on the Pax World Growth Fund (800-767-1729). The fund has been around for more than two years and would like to pick up more assets---plain and simple.

For this year, the fund is up almost 7 percent. And, as of June 30, had 68.5 percent of its assets invested in U.S. stock; 9.5 percent invested in foreign stocks; and the remainder in cash or cash equivalents.

Speaking of funds and money, it will take more than ever before to become a new shareholder in American Century's funds, (800-345-2021).

Beginning Oct. 1, all initial investments into new, reopened and automatic accounts will have to meet the individual fund's initial investments requirements---typically $2,500 to $3000. When James Stowers started the company in 1958, one of his founding ideas was to have an investment product that anyone could afford to invest in. So, he created the 20th Century Fund family, and, if you only had $1 to invest, that was enough to get started.

Times change.

To read more articles, please visit the column archive.




[ top ]