To stay ahead, follow the records of fund managers

Mutual funds


BOSTON — *TC BOSTON -- There's something to be said for the no-name fund manager who still stays a step ahead of the competition.

The names John Ballen, Daniel Leonard and Edward Antoian may not mean much to the average investor.

Their long-term records, though, stand up against the likes of better-known managers Jeffrey Vinik and Mario Gabelli, Lipper Analytical Services Inc. reported.

Ballen's MFS Emerging Growth Fund is up almost 220 percent in the past five years -- more than double Gabelli Asset Fund's gain in the same period, according to Lipper Analytical.

Leonard's Invesco Strategic Technology Fund and Antoian's Delcap Fund are up 19.9 percent and 18.5 percent a year, respectively, in the past 10 years.

Fidelity Magellan Fund, the nation's biggest mutual fund, which Vinik ran for most of the past four years, is up 15 percent a year in the same period, Lipper Analytical reported.

So what's the lesson here? Know your fund managers and especially their records -- even if no one else does.

"One of the great advantages of using a statistical approach to review funds is you come up with names of managers you don't recognize," said A. Michael Lipper, president of New York's Lipper Analytical. "Investors have to look at more than just the headlines to find funds that make a good investment."

And then get to know the manager. We want to know every quirk of the candidates we elect as president of the United States. Our fund manager can make a lot bigger difference in our immediate lives.

With billions of dollars rolling each month into stock funds from investors saving for retirement, it's paramount that investors learn as much as they can about who's managing their money. The problem is some managers prefer to stay out of the limelight, and information can be limited.

"The less notoriety I get the better," said Leonard, senior vice president, who manages $1.3 billion in assets for Denver's Invesco Trust Co. "I'm just happy doing a good job."

Not that Leonard himself likes all the results of this humility. His low profile has meant Invesco's technology fund isn't as big as it might otherwise be. The 12-year-old Invesco Strategic Technology Fund has just $700 million in assets. The average technology stock fund was launched less than three years ago and has about $400 million in assets, according to Lipper Analytical.

"We're working on picking up our name recognition and marketing," Leonard said. That means more advertising and more interviews with the media.

Most investors can't just pick up the telephone and call a manager to find out how he makes his investment decisions. Still, there are ways to find out more about money managers.

The simplest way is by reading a fund's prospectus. The Securities and Exchange Commission requires fund groups to disclose in prospectuses the names of managers, their length of tenure and their business experience in the past five years. Exceptions to the rules are money market funds, stock and bond index funds, and team-managed funds.

"We want to make sure funds include the names of portfolio managers when they're required to," said Robert Plaze, associate director of the SEC's investment management division.

If information contained in prospectuses isn't enough, there are other options. "Search through publications to see whether the managers have been interviewed somewhere recently," said Stephen Janachowski, an independent investment adviser in San Francisco.

"You also can call the fund company to get dry data about a manager's background."

Some companies issue newsletters, publish information on the Internet and offer toll-free phone lines that give updates about how managers feel about the market, Janachowski said. "Overall, there's a lot more information available today than there was five years ago," he said.

Research groups like Morningstar Inc. publish biographical information in their fund reports. For example, Morningstar reports that Ballen, 36, started managing other people's money in late 1986, three years after joining Boston-based Massachusetts Financial Services Co. from Stanford University's business school.

If investors prefer to link their future to a management group rather than to a single manager, a number of companies offer top-performing funds overseen by teams of managers.

The firms include Twentieth Century Cos., Putnam Investments, Capital Research & Management Co. and Scudder, Stevens & Clark Inc.

By using teams to manage funds, companies are less susceptible to shareholder redemptions when a top-ranked manager leaves for another job or retires.

"Scudder doesn't buy into the concept of the star system," said Gavin Quill, marketing vice president at the Boston-based firm.

"We think the team-managed approach provides the continuity and breadth of perspective to serve investors over the long term."

Pub Date: 6/09/96

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