Hi Lloyd, I expect to hear from Kirk or Billy Hall when the 10K is filed. In the meantime, here is the article on microcap funds.
Funds Like Micro-Caps In a Big Way
By Lauren Young
Dow Jones News Service
When the mutual-fund industry hits on a marketing idea, it goes all
the way with it. And in 1996, the trend has been micro-caps, stocks
of the tiniest of tiny companies.
At least seven mutual funds investing in tiny-company stocks have been
started in 1996, including the newest addition to the bunch - Scudder,
Stevens & Clark's fledgling Micro Cap Fund. And one of the top
performing mutual funds for the year is a micro-cap fund. Another
milestone for micro-caps: NatWest Securities became the first big
investment bank to set up a micro-cap research group.
Micro-cap funds usually invest in companies with a capitalization of
$250 million or less. Such companies rarely attract the attention of
the biggest brokerage-firm analysts.
Several other micro-cap mutual funds already are in the works for
1997, including offerings from Pioneer Group and Phoenix Investments.
Responding to an emerging investment trend, fund-tracker Lipper
Analytical Services Inc. is planning to create a micro-cap mutual fund
category during the first quarter of the year.
While the lack of attention paid to micro-caps provides opportunities
for investors to find unheralded bargains, obscurity cuts both ways.
"It seems micro-caps are being ignored by the rest of the world,"
gripes Garrett Van Wagoner, a former Govett Asset Management manager
who started his own micro-cap fund last January. Because small stocks
didn't participate in much of 1996's large-cap rally, micro-caps are
still a bargain, to the detriment of fund managers' performance
statistics.
"It's the cheapest sector of the market-place right now," Mr. Van
Wagoner says.
That certainly wasn't the case during the first part of 1996, when
micro-cap stocks ran strong. Mr. Van Wagoner's Micro-Cap Fund, for
example, was up 60% for the year through the end of May. His fund is
now up only 19.5$ for the year through Dec. 23. Others, such as
Portico Micro-Cap Fund, up 53.1%, have managed to stay at the top of
performance charts all year.
But it's already too late to get into this and some other micro-cap
funds. To keep micro-cap funds focused on tiny-company stocks, many
of these funds are capped when assets reach a certain size. Franklin
MicroCap Value Fund, introduced in December, 1995, closed its doors to
nonretirement investors in early July when assets neared $100 million
- popular cutoff point for micro-cap funds. It's up 26.6% in 1996.
(End of Page One) |
