Don't Judge a Fund by the Book
Management guru and Harvard Business School professor Clayton Christensen was once called a rising star of the New Economy and "the most important business thinker in the world today." His celebrated 1997 book, The Innovator's Dilemma, remains a best-seller. So when he launched a mutual fund last year, the financial world had high expectations.
As it turned out, the Nasdaq peaked on the fund's first day, Mar. 10, 2000. And, BusinessWeek has discovered through SEC filings, the fund quietly closed before seeing its first birthday. The $3.8 million Disruptive Growth Fund, which Christensen co-managed with St. Louis brokerage owner Neil Eisner, held 45 stocks, with Broadcom, Digex, and EMC among the largest holdings.
When the fund liquidated in February, it had lost 64% of its value. Christensen and Eisner declined to comment.
Nearly all the stocks were chosen by Christensen based on his theory that companies that develop innovative products--"disruptive technologies"--can topple market leaders. In hindsight, however, the only disruption was in sky-high valuations for tech stocks.
By Susan Scherreik
from Business Week
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