Growth Fund

Growth Fund of America moves in fits and starts.This fund is one of the few domestic-focused offerings from the estimable American Funds stable that emphasizes capital appreciation. It puts nearly 75 percent of its assets in technology and services -- mainly media companies -- whereas most of its siblings avoid sector concentrations.The fund's managers follow a growth-at-a-reasonable-price strategy, often taking positions in fallen growth stocks such as Cendant. A market darling in 1997, the stock was hammered last year after revelations of accounting irregularities.

THERE were more top-performing funds last quarter than usual. It's not that performance necessarily was better, it's that one of the major ways for tracking performance has changed.Lipper Inc. has changed the way it categorizes funds, a move designed to provide investors with more accurate data on what a fund really does and how it stacks up against competitors. Better and improved data is terrific, but it won't come without some short-term confusion, particularly when it comes to what investors see in the paper and in ads touting performance.

MOST mutual fund advertisements carry a warning that past performance is no guarantee of future returns.Last week, the Securities and Exchange Commission issued a big reminder of just how true that can be.The SEC censured and fined the Van Kampen Investment Advisory Corp. and its former chief investment officer. They had failed to say in advertising how much the company's Growth fund was affected by hot initial public offering stocks and how it would be unreasonable to assume that performance could continue.

Running with a fast crowd has helped Alliance Premier Growth Fund come out in front.It is hardly a surprise that this offering's assets have exploded. Many investors have been tantalized by the fund's mouth-watering returns in recent years.In 1998 alone, the fund notched a gain of nearly 50 percent for the year, beating out every one of its peers -- not to mention walloping the S&P 500 index. (The fund is looking slower in 1999, however, owing in part to its stake in McKesson HBOC, which imploded in April.

Goldman Sachs Capital Growth Fund has found its own path to success.Since Herb Ehlers and his team took charge in January 1997, this fund has been cruising in high gear. Despite its above-average expense ratio, the fund has outrun the S&P 500 index by a wide margin, a feat few of its large-blend rivals can claim. Investors have apparently taken notice: Ehlers reports that new money has been steadily flowing in during the first quarter of 1999.As do many of his peers, Ehlers follows a growth-at-a-reasonable-price strategy.

Delaware Select Growth A has made the most of its hall pass.This fund's performance has been excellent. Its returns since its inception nearly five years ago as Voyageur Aggressive Growth fund (Delaware acquired the Voyageur funds in 1997) place it in the top decile of all mutual funds.As the Standard & Poor's 500 has posted stellar gains over the past three years, the fund has surpassed it by a stunning 13 percentage points a year, largely on the back of winners such as Amazon.com and America Online Inc.The fund has virtually no investment restrictions to hamper its pursuit of total return, so Gerald Frey has used a flexible strategy in his two years as manager.

Invesco Blue Chip Growth Fund is shining in 1999, but not too brightly.Although this fund was rewarded with a top-tier performance in 1998 for betting on the market's biggest players, such concentration has not yielded much of a payoff so far in 1999.The market broadened in the second quarter, volatility followed, and even the biggest technology names suffered. As a result, this concentrated fund has slid into the second quartile among its large-growth peers for the year to date through Oct. 18.That large-cap focus is a result of lead manager Trent May's division of the fund into core and noncore investments.

WHEN MUTUAL fund manager William J. Stromberg sits down with corporate executives, he asks them a simple question and often gets a puzzled look."What do you think about your dividend?" he says.The question is a surprise because it's rarely asked anymore.The word "dividend" seems to have gotten lost as money managers and investors have become fixated on flying stock prices, rather than how much or how little a company pays in dividends.But to Stromberg, manager of T. Rowe Price Dividend Growth Fund, dividends are a key element to picking good companies.

Monument Funds Group Inc. has launched a mutual fund that invests in Internet stocks, the company said yesterday.The fund, called the Monument Internet Fund, will invest at least 65 percent of its assets in companies involved in the World Wide Web, e-mail, electronic commerce and other Internet services.Companies must generate at least 50 percent of their assets, gross income or net profit from Internet-related businesses to be considered for the fund."We understand these kind of companies and what makes them tick," said David A. Kugler, president of Laurel-based Monument Funds Group.

In this mostly down market, many people wonder if they should sell their mutual funds."Continuing poor performance of your fund relative to a relevant benchmark is the No. 1 reason for selling a fund," says Albert J. Fredman, finance professor at California State University, Fullerton. "A simple way to determine which benchmark to use is to check your fund's prospectus or annual report to find out what the fund compares its performance against."Other reasons to sell a fund, according to the American Institute of Individual Investors, include frequent management changes, rising expense ratios which hurt performance and shrinking assets which cause sizable redemptions and dumping of good stocks to raise cash.

After surviving a stock market free fall last year, U.S. money managers faced a topsy-turvy start to 2009 before a formidable spring rally. One of the standouts this year has been T. Rowe Price's Joseph Milano, who has been managing the New America Growth Fund since 2002. While the fund lost 38.3 percent last year, it still bested 67 percent of its peers in its large-growth category, according to Morningstar. The fund's three-year and five-year returns are also impressive, outperforming 95 percent and 85 percent of its peer funds, respectively.

The only people who like bad mutual funds are the people who run them. But when a mutual fund firm buys one of its own laggards for investors - or recommends through an its advisory service that investors purchase one of its stinkers for "asset-allocation reasons," that love of a bad fund becomes costly for shareholders. In the fund world, there's an increasing movement toward funds made up of other funds, wrap programs and advisory relationships where a consumer allows a fund company to build a portfolio.

Investors who lost close to half their money in the stock market between 2000 and 2002 are still scarred by the experience. And as the stock market has sunk from its mid-July highs, they have been wrestling with themselves, trying to figure out their next move, given the promises they made to themselves amid the market's fury a few years ago. Many vowed then not to hesitate ever again, but to move quickly out of their stocks and stock funds at the...

Which Maryland congressman owed more than $10,000 in credit-card debt last year? Which one lost tens of thousands of dollars investing in his brother-in-law's company? Which Maryland senator gave the old portfolio a political face-lift? The answers, in the forms that senators and representatives just filed showing the previous year's financial activity, are worth a peek. If the measure of a man is revealed first in his friendships and second in what he reads, where he puts his money can't be far behind.

It was the kind of notice that millions of mutual fund investors get - and ignore - over the course of the year, a simple two-page message about a change of funds in the retirement plan. Like most notices that retirement funds are being changed, it was probably greeted with a shrug of the shoulders and a sigh of resignation. But investors in retirement plans across the country can learn something from the subtle changes that went into effect in early October in the Savings Plus Program for California state employees.

Q: I'm considering shares of Toyota Motor Corp. because it seems the company is doing all the right things. What is your opinion? - K.C., via the Internet A: It is the shining star of the automobile industry, though that industry is rather gloomy these days. Despite a healthy balance sheet, this global Japanese carmaker has been criticized for going full speed down the road of dramatic growth as it attempts to overtake General Motors Corp. as the world's largest carmaker. Rather than put additional money into plants and equipment to continue this sales momentum, critics contend it should be working harder to improve earnings and shareholder return.

Q. What is happening with eBay Inc.? It was once such a strong stock but hasn't done well lately. - M.B., via the Internet A. Wall Street sometimes has great expectations. When this online auction powerhouse acknowledged that it wouldn't meet analyst expectations, investors made it pay the price. Its projection of sales between $4.25 billion and $4.35 billion this year didn't meet the consensus analyst estimate of $4.37 billion. In addition, after meeting or beating Wall Street profit expectations in all but one quarter since 2001, it missed by a penny in the fourth quarter of 2004.

Surfers seek the perfect wave. Investors seek the perfect fund. The concept of an "all-weather" mutual fund that will prosper in sunny and stormy markets alike is gaining prominence as the nation's 401(k) retirement plans and proposed Social Security private investment accounts take center stage. Investors need trustworthy investments they can depend upon to meet long-term goals. As they ponder the basic investment choices available, their greatest fear is volatility and a decline in value.

The search for real value in the stock market is supposed to take you away from the crowd, but what do you do when the masses believe that traditional value stocks are the place to be? That has been the judgment of the crowd for the past few years, and it's making life increasingly difficult for veteran value hunters. Of course, value is in the eye of the beholder. A stock might be judged to be a value when it sells for a relatively low price compared with underlying earnings per share, or compared with some measure of the intrinsic worth of the company's assets.

ART BONNEL doesn't know precisely what is in his mid-cap growth fund right now. He knows exactly what is not in it. Stocks. In a move that has been the undoing of a number of managers in the past, Bonnel moved his Bonnel Growth Fund entirely into cash on Jan. 24. Because Bonnel leaves the cash management to a partner, he's not entirely sure of the money market-type investments in the fund now. Instead he's focused on the market, anxious to get back in....