Long-term matters most

Andrew Leckey

April 17, 1991|By Andrew Leckey | Andrew Leckey,1987 Tribune Media Services, Inc. 435 N. Michigan Ave., Chicago, Ill. 606ll.

The mutual fund industry has received an enormous sales boost for 1991, courtesy of truly impressive first-quarter performance figures.

You'll be hearing plenty about those numbers in the advertisements of fund companies, but keep in mind that what matters is long-term performance. For example, the two top-performing funds this year were downright disasters last year. In addition, investors shouldn't expect the first quarter to necessarily be duplicated quarter-by-quarter the rest of this year.

The average stock mutual fund rose 17.19 percent in the quarter, compared with an 11 percent gain by the Dow Jones industrial average and 14.51 percent increase for the Standard & Poor's 500. That performance, if annualized, would result in a whopping 94.84 percent gain.

"It may have been too strong of a quarter, for these figures aren't the nature of mutual-fund investing, which has an historical average of 9.4 percent," cautioned A. Michael Lipper, president of Lipper Analytical Services, which tracks the funds.

The best-performing funds invested in health/biotechnology; technology; small company growth; financial services; and real estate. The only two groups to post declines were gold funds and world income funds.

"I'm flexible in my view, with big name stocks such as General Motors, ITT Corp. and Eastman Kodak helping our performance, along with small companies such as American Film Technology," said Heiko Thieme, portfolio manager of the top-ranked American Heritage Fund, up 54.17 percent in the quarter.

"I expect the stock market to exceed the 3,000 level this year and remain at 3,500 in 1992, with firms such as Philip Morris Cos., Reader's Digest and Hilton Hotels leading the way," said Thieme.

"We specialize in small-capitalization stocks, and have benefited from big gains by Penril Corp., In Home Health Inc., Martech U.S.A., AST Research and, oh yes, Frederick's of Hollywood," said Ed Bernstein, portfolio manager of the second-ranked Prudent Speculator Leveraged Fund, up 48.32 percent.

The top-performing stock funds of 1991, according to Lipper, are:

* American Heritage Fund, New York; $1.5 million in assets; no load (no initial sales charge); $5,000 minimum investment; up 54.17 percent.

* Prudent Speculator Leveraged Fund, Los Angeles; $11 million assets; no load; $1,000 minimum; up 48.32 percent.

* Oberweis Emerging Growth Fund, Hamilton Investments, Aurora, Ill.; $15 million assets; 4 percent load; $5,000 minimum; .. up 43.85 percent.

* T. Rowe Price Science & Technology, Baltimore; $153 million assets; no load; $2,000 minimum; up 43.58 percent.

* Fidelity Select Medical Delivery, Boston; $140 million assets; 3 percent load; $1,000 minimum; up 41.61 percent.

* Twentieth Century Ultra Investors, Kansas City, Mo.; $900 million assets; no load; no minimum initial investment; up 40.75 percent.

* Fidelity Select Biotechnology, Boston; $526 million assets; 3 percent load; $1,000 minimum; up 40.42 percent.

* Transamerica Technology, Houston; $81 million assets; 4.75 percent load; $100 minimum; up 39.61 percent.

* Montgomery Small Capitalization Fund, San Francisco; $26 million assets; no load; $5,000 minimum; up 39.57 percent.

* Oppenheimer Global Biotechnology, New York; $55 million assets; 5.75 percent load; $1,000 minimum; up 38.97 percent.

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