TRADITIONAL VALUE

It's hard not to like the notion of value fund investing. Who, after all, doesn't enjoy getting something---anything---at a bargain price. From coupon shopping to flea markets to auctions, it's almost as though inside each of us is a bargain-hunting gene that makes us smile whenever we feel as though we've outwitted the full-price God.

On Wall Street, the same kind of thing is true for traditional value managers: they love buying the stocks of great companies when selling at bargain basement prices. The thing that separates the Main Street shopper from the Wall Street professional, however, is that the investment professional isn't shopping for pleasure but for purpose. And while bargain priced stocks are certainly around, folks haven't been rewarded much for investing in them over the last handful of years.

Now, maybe all of that is changing.

Look at the short-term performance numbers on the various types of value funds in Lipper's rankings and you'll see that they have been slowing creeping out from minus year-to-date total return numbers to positive ground. Large-cap value funds, for instance gained 81 basis points (100 basis points is equal to 1 percent), during the week beginning Nov. 4th and the 11th. That brought their year-to-date total return to 7.79 percent. Or, almost four times the 2 percent year-to-date total return the grouped logged in for the nine months ending September 30.

But short spurts of positive actively for value funds is nothing new. On more than one occasion over the past year it looked as though they were going to come back from the dead. But didn't.

David Schafer, portfolio manager of the Strong Schafer Value Fund, (800-368-1030), said that there have been a few false starts in the value arena since the fall of 1998. "We started doing better in October a year ago, and then started doing better in April of this year. But both of those petered out," he says. "This one has now been going on for a little over a month. So we'll see."

With a lot of years in the business, ( his investment career began in 1966), and a concentrated portfolio of 33 stocks, Schafer knows what it's like to be both on top and at the bottom of the value game. "At the end of 1997, we were one of a handful of funds that had beaten the S & P 500 for the 5-and 10-year periods. Now, with the couple of bad years we've had, were' in the scrap heap."

But down isn't necessarily out. Especially if you've ever noticed that there can be a correlation between the severity in the drop, and the intensity of the rise in the price of things. Or, look at who else is putting money behind value when it's not the hottest fund type around. Alliance, Janus and Berger, for instance, will all be launching value funds in the near future.

Even in the small-cap value fund arena there's enthusiasm. William Nasgovitz, president of Heartland Funds,(800-432-7856), a value fund family that focuses on investing in small and micro-cap value stocks, considers the valuation of small cap value stocks as "absurdly cheap".He's telling shareholders that "now is an opportune time to add or to increase small cap value exposure to your portfolio".

If you buy into the value story, go in with eyes wide open.

"You don't put money into a value fund today and expect it to pop in 10 days as we've been accustomed to on growth funds," says Steve Schoepke, vice president of research and product development at SunAmerica Asset Management Corp. in New York. "When we're talking about value portfolios, one certainly needs to be a long-term investor."

How long is long-term? The pros say about 5 years.