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Strategies & Market Trends : Value Investing

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To: gcrispin who wrote (26426)	3/29/2007 10:46:06 PM
From: E_K_S	Read Replies (1) of 78758

Hi gcrispin - Regarding WPL - The Q1 outflow (of $325 million) represent about 4.6% of their total assets under management ($7.1 billion). It's small but not a good trend. What is interesting however is management expects a long term analyzed portfolio return of 15% which seems a bit high. If they can deliver this performance then their clients will be quite happy. If investors do expect the outflows to continue, then WPL will sell off further. Management has talked to their larger clients about their performance expectations so I think any further large outflows will be limited. A lot depends on how well their future overall portfolio performance is and that they stay diversified and do not leverage their investments with risky speculations. Many hedge funds have got into trouble with this type of investment style. Therefore, the fund managers must be careful not to chase performance returns but rather stick to good solid investment values. This is one that needs to be watched closely. If portfolio turnover is high and is on going, that may raise a red flag to me. I have a very small starter position which is just enough to keep me interested to see how things develop. EKS

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