Mutual funds in slow motion

Andrew Leckey

July 17, 1991|By Andrew Leckey | Andrew Leckey,Tribune Media Services

After a fast start to 1991, the nation's mutual funds have shifted into slow motion. Which isn't all that bad. Results could've been considerably worse in this slow economy and tricky stock market environment.

The average mutual fund was up 11 percent in value in the first half, most gains occurring in the first three months of the year.

"After a strong first quarter, a flat second quarter was quite encouraging, for funds are still compounding at a rate that's above normal," said A. Michael Lipper, president of New York's Lipper Analytical Services, which tracks the nation's funds. "Frankly, I'd be satisfied if there was no change from here to the end of the year."

Among the best performers, financial services funds were up 28 percent in the first half, health/biotechnology funds 26 percent, small company growth funds 24 percent, and real estate funds 21 percent.

Small capitalization funds were impressive. "I expect further gains in our small-capitalization portfolio through year-end, improving as the economy improves and the stock market experiences an upswing," said Ed Bernstein, manager of Prudent Speculator Leveraged Fund, up 44.97 percent for the half.

Stocks that did well for Bernstein in the first half were Cascade International in clothing and cosmetics stores and Penril Corp. in telecommunications.

"I like consumer/retail companies because Americans are beginning to spend again, but I'm staying away from large

capital-spending companies such as automobiles and mainframe computers," said Stuart Roberts, manager of Montgomery Small Cap Fund, up 41.60 percent.

Stocks that prospered for Roberts' fund included J. Baker Inc., licenser of shoe departments in discount stores; and Thornapple Valley, a major name in the pork products industry.

"The retailing industry has been outperforming the market since last October, with most successful stock picks in the discount business or in businesses which specialize in small-item purchases, such as fabric or cosmetics," said Deborah Wheeler, manager of Fidelity Select Retailing, up 40.76 percent.

Top-performing mutual funds in the first half of 1991, according to Lipper, were:

American Heritage Fund, New York, $3 million in assets, no "load" (initial sales charge), $5,000 minimum initial investment, up 52.78 percent.

Prudent Speculator Leveraged Fund, Los Angeles, $17 million assets, no load, $1,000 minimum, up 44.97 percent.

Dean Witter High Yield Fund, New York, $420 million assets, no load, $1,000 minimum, up 44.45 percent.

Montgomery Small Cap Fund, San Francisco, $27 million assets, no load, $5,000 minimum, up 41.60 percent.

Fidelity Select Retailing, Boston, $30 million assets, 3 percent load, $1,000 minimum, up 40.76 percent.

Liberty High Income Bond Fund, Pittsburgh, $272 million assets, 4.5 percent load, $500 minimum, up 38.33 percent.

Safeco Growth Fund, Seattle, $121 million assets, no load, $1,000 minimum, up 37.93 percent.

AMEV Advantage High Yield Fund, St. Paul, Minn., $24 million assets, 4.5 percent load, $2,500 minimum, up 37.41 percent.

Vista Growth & Income Fund, Kansas City, Mo., $30 million assets, 4.5 percent load, $2,500 minimum, up 36.43 percent.

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