Here is the Kiplinger's article to which MB referred:
kiplinger.com
Michael Burke Retired Fund and Money Manager
Before retiring in 1988, Michael Burke ran a government bond fund
at American Capital Management & Research. He has also
managed money at a private hedge fund and for the St. Paul
Companies, an insurer. Nowadays, Burke spends his time
lecturing, writing--a book called The I-Hate-To-Lose-Money
Investment Guide is unpublished--and managing his own six-figure
investment portfolio. His approach is simple: "Basically, I search for
where the bargains are." When closed-end funds sell at wide
discounts, he tends to own them; when they don't, he doesn't.
Burke, 47, endorses one of the most aggressive domestic funds,
H&Q Life Sciences Investors (HQL, $9; 800-327-6679), recently
selling at an 18% discount to NAV. HQL is more speculative than
H&Q Healthcare Investors, which is also managed by Alan Carr.
The fund owns mostly small health-equipment, service and biotech
companies, and holds about a third of assets in venture-capital-type
restricted securities. It had a miserable 1994, losing 18% on NAV.
All the more reason for Burke's enthusiasm: "This is one of the few
places where individuals can play venture capital in medical
technology and get it at a discount."
Burke's affinity for the downtrodden is in evidence again in his
support of Morgan Stanley Asia-Pacific (APF, $10; 800-221-6726),
which invests not only in rapidly growing Asian markets but also in
the established markets of Japan and Australia. "The excellent
long-term potential of Asia, which was emphasized when a lot of
these funds were brought public, still exists," says Burke. "The main
change is that the stocks in the funds are cheaper." Burke adds that
Morgan Stanley is a proven player in emerging markets and that the
inclusion of Japanese issues adds some stability to the portfolio.
Recently, the nine-month-old fund sold at a huge 22% discount to
NAV.
"I believe in speculating in stocks, not bonds," Burke says. So for a
bond fund he favors Transamerica Income (TAI, $23), a relatively
staid corporate fund that employs no leverage and holds less than
10% of assets in junk bonds. About half of its assets, though, were
recently in BBB-rated bonds. The fund recently sold at a 2%
discount to NAV and had a current yield of 8.5%. Historically, Burke
notes, this fund has sold at a premium to NAV more often than at a
discount. Although 1994 was an off year for TAI--it lost 4.6% on
NAV--manager Sharon Kilmer has produced above-average
returns over the longer term. |
