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Technology Stocks : SILICON STORAGE SSTI Flash Mem -- Ignore unavailable to you. Want to Upgrade?

To: Ram Seetharaman who wrote (555)	4/28/2000 4:17:00 PM
From: Ram Seetharaman	Respond to of 1881

From Canada with dough for SSTI! Friday April 28, 4:02 pm Eastern Time Canadian Mutual Fund Pushes New Extremes By Bob Beaty, Canada Columnist Extreme Canadian Equity brings an innovative, aggressive style of play to investing. How's this for an oxymoron: an aggressive Canadian equity mutual fund? Before all you Canada fans in Duluth or Oconomowoc run out and dial up your online trader to buy some -- don't bother. It's only available to Canadians. But it heralds a new type of ``extreme'' trading fund that more and more high risk-oriented investors have been asking for. Toronto-based Synergy Mutual Funds opened its Extreme Canadian Equity fund a couple of weeks ago, and I had an opportunity to talk to Andrew McCreath, lead of three managers on the fund team, earlier this week. I don't usually write on mutual funds, but this one caught my attention. Three-Way Play While aggressive in nature, the Extreme fund has some strict disciplines. The number of stocks in the fund are capped at 25 names divided into three areas: core; theme; and rotational. The core area holds 15 names, with each of three managers choosing five, primarily large blue-chip names. Core trades have already been executed in stocks such as Biovail (NYSE:BVF - news), Nortel (NT: NYSE) and Bombardier (CC:BBD/B: Canada). Single positions in each core stock can reach 9.9% of the fund and frequently do. Unlike traditional equity funds, the fund takes big bets and can trade out the stock in hours, days or weeks. Turnover is expected to be high, as the managers apply their experience and, at times, a day-trader mentality, to any number of situations. The fund can be 100% cash -- unique among mutual funds -- but that would only happen in a rare instance, though the fund currently has a 35% cash position. The managers plan to cap new money as soon as it reaches C$300 million. The theme area concentrates on specific sectors of the market. For example, McCreath currently likes the flash-memory area, his rationale being that wireless demand by far outstrips supply. Names such as Silicon Storage (Nasdaq:SSTI - news) and SanDisk (Nasdaq:SNDK - news) are a couple of his current favorites. Biotech is the other current theme in the fund, represented by names such as Angiotech (Nasdaq:ANPI - news) and Immunex (Nasdaq:IMNX - news). The rotational area takes advantage of sector rotation based on economics, market psychology and momentum. Takeovers and special situations will also be traded in this area. The Extreme fund will take full advantage of the allowable 30% foreign content rule, which allows Canadian funds to buy equities in foreign markets and still remain eligible investments for registered Canadian retirement plans. Impressive Stats The managers running this fund aren't just three mopes with other peoples' money who like to trade. All have established successful track records with Synergy's more traditional funds. Lead manager McCreath runs the Synergy Canadian Growth Fund, which racked up a 48% return last year. Co-manager Dave Picton, manager of the Synergy Momentum fund, returned 56%. The third member of the trio, Peter Hodson, responsible for the Synergy Canadian Small Cap fund, turned in a whopping 68% in 1999. Combining the strengths of the three onto one fund means that the action won't be dull for either the managers or for investors who feel that this unique fund offering has a place in the aggressive portion of their portfolio. Another intriguing feature is the diversity of styles. This isn't a buy and hold, value, or growth fund, although it could be, if it wanted to. By opening up to different disciplines -- the fund can even use derivatives if they're so inclined -- the mandate is anticipate potentially profitable situations. The fund will play IPOs, takeovers and special situations, while retaining that core component. Breakaway From Convention While the old rules still apply, the speed of information flow and opportunity can now be measured in minutes and hours as opposed to days and weeks. The Extreme fund is a reflection of these changed market parameters. Expect others, on both sides of the border, to follow suit. Even day-traders might like this fund. The managers will get faster and cheaper execution. In a market rout, institutions can move faster and have better surety of execution. They rarely, if ever, sit on hold or get a busy signal. Once again, Canada has beaten the US, this time by developing a truly nifty kind of fund. I love it when that happens. Bob Beaty is worldlyinvestor.com's Canada Editor. He worked for 20 years in the brokerage industry, in both Canada and the UK. Now primarily Internet-based, he has written extensively on stocks, bonds and market-related issues for a variety of Web sites. His column suggests investment and trading opportunities in the Canadian market.