DJ Mutual Funds Take Part In Rally But Not Aggressively
19 Apr 08:15
By John Shipman
Of DOW JONES NEWSWIRES
(This report was published late Wednesday)
NEW YORK (Dow Jones)--The Federal Reserve's surprise 50 basis-point interest
rate cut sparked some frenzied buying on Wall Street Wednesday, but mutual
funds companies weren't deviating much from their regular trading scheme.
Colin Ferenbach, portfolio manager of the Haven Fund, said his level of
buying activity was "fairly high," but said he started buying before the Fed's
rate-cut news based on Tuesday's action in Cisco Systems Inc.'s (CSCO) stock.
Cisco sold off Tuesday after more downbeat forecasts from the company, but
the stock didn't fall as much as some may have expected, signaling to some the
market may have bottomed.
Ferenbach said he was selling some defensive issues, that have "behaved
brilliantly," and rotating into semiconductors "to a degree" and into "niche"
telecom stocks.
Allan Rudnick, chief investment officer at Kayne Anderson Rudnick Investment
Management, said his firm generally stays fully invested in the market with
little cash on the sidelines.
Rudnick said the firm, with about $6 billion under management, was
participating in Wednesday's rally, but its level of activity had not increased
from previous trading sessions.
Blue chip names like General Electric Co. (GE), Intel Corp. (INTC) and
Microsoft Corp. (MSFT) were some of the stocks Rudnick was buying, he said.
San Francisco's TransAmerica Premier Funds Chief Investment Officer Gary
Rolle said Wednesday's action probably featured more buying by hedge funds than
by mutual funds.
"I think it's more the hedge funds that have to cover (short positions) that
have to get out," Rolle said.
As for the much-discussed sideline cash, Rolle said since most mutual funds
try to stay fully invested, cash on the sidelines is either new money that
hasn'tdecided where to go, or on the side for other reasons.
Rolle said the day's market action hadn't significantly changed his firms
trading activity.
At asset manager Waddell & Reed Financial Inc. (WDR), Chief Investment
Officer Hank Herrmann said: "I can say that it's not totally business as
usual," but the firm was not being particularly aggressive about buying stock.
Herrmann agreed that a lot of the market action was due to "a big-time
squeeze of hedge funds," and the firms funds were also sitting on little cash.
"Clients don't like it, and you're afraid to miss out," on a rally if not
fully invested, Herrmann explained.
"I don't think it's going to change our buying patterns," said Herrmann,
commenting on the day's market action.
Vin Loporchio, spokesman at Fidelity Investments, said Wednesday was "a
little busier day than we would typically have," with respect to investor call
resulting from the market's reaction to the action by the Fed.
-By John Shipman, Dow Jones Newswires; 201-938-5171;
john.shipman@dowjones.com
(END) DOW JONES NEWS 04-19-01
08:15 AM |
