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To: Captain James T. Kirk who wrote (28384)	12/19/1997 3:56:00 PM
From: Yuan Xiang	Respond to of 61433

December 19, 1997 Top-Performing Interactive Investments Launches Two Funds By THOMAS D. LAURICELLA Dow Jones Newswires NEW YORK -- Ken Kam and Kevin Landis, the founders of Interactive Investments, have made up one of the hottest mutual fund teams around - but now they're going their separate ways. It's not that they're breaking up the company, which offers The Technology Value Fund, the top-performing tech fund since its inception just over three years ago. Rather, Interactive Investments has rolled out two new funds - one run by each manager. Kam is now managing the Medical Specialists Fund and Landis The Technology Leaders Fund. They continue to share the job of running the Technology Value Fund, which invests in a blend of the two industries. Kam and Landis made a splash by launching San Jose, Calif.-based Interactive Investments with no previous experience managing money. What they did have was a background and connections in the technology and medical equipment industries, and a love for investing. The Technology Value Fund was just their way of leveraging that. "We're people with roots in these businesses and the vehicle for investing in the businesses is the fund," said Landis. So far, their strategy of letting first-hand experience guide the stock picks has worked. According to Lipper Analytical Services, the no-load Technology Value Fund has chalked up an average annualized return of 41.03% since its inception in May 1994, easily topping the average technology fund's 22.81% over that period, and making it the No. 1 fund in its class. The recent turmoil in technology stocks has made for some rough going, though. With 1997 about done, Technology Value is up 5.31% for the year - pretty poor, but not too far behind the average technology fund's 6.54%, according to Lipper. Although technology has looked bleak lately, Landis said he hopes the current market environment will end up helping the fledgling Technology Leaders Fund. He's optimistic despite the despite the carnage among some of Technology Value Fund's biggest holdings, including Acsend Communications (ASND), Altera Corp. (ALTR) and Integrated Process Equipment (IPEC). The Leaders Fund is meant to more conservative than the Value Fund, focusing on companies that dominate their industries - such as Intel (INTC) or Cisco Systems (CSCO). Landis notes that assembling a portfolio of top-name stocks can be pricey. "They're not undiscovered names and their prices can reflect that stature, so it can be hard to impose a value discipline," he said. But the sell-off in technology stocks means overpaying is less of a problem now, Landis said. The downdraft in many big-name tech stocks, in fact, makes this "the perfect time to put the Leaders Fund together." As for Kam's Medical Specialists Fund, it's intended to be more aggressive than the Value Fund, focusing on less-established companies in the medical products industry. "I'm focusing on what could be the least-efficient part of the medical medical technology stock market - the part that deals with companies before they have products for sale," Kam said. The customary methods of valuing companies don't work in his corner of the market, Kam argues. "The thing that creates the value in these companies are clinical results and they don't show up on income statements or balance sheets." He looks to industry contacts and the users of the new technologies for his stock picks. Kam cites two stocks currently in the Value Fund that are potential candidates for the new fund: CardioThoracic Systems, Inc. (CTSI) and Heartport Inc. (HPRT). Both companies develop methods for surgeons to conduct a cardiac bypass without cutting open a patient and each has products already through clinical trials. "The thing that's going to drive these stocks are physician acceptance and training and I don't think they're going to have a hard time convincing people," Kam said. However, Kam said both stocks have suffered along with other science-related stocks amid concerns over events in Asia. "If that's why they've been sold off, then it's for reasons irrevelant to a buyer of these stocks," he said. Kam and Landis say their goal is to create a series of sector funds, each run by managers with first-hand experience in an industry. With the Technology Value having ballooned to $205 million in assets from $35 million at the start of the year, Interactive Investments has already been adding staff. Kam and Landis brought in a full-time trader to handle transactions, and are planning to hire analysts to help with the stock-picking. Despite Interactive Investment's expansion plans, the original philosophy remains intact."First-hand experience gives you an advantage," Kam said, "and we intend to apply that to every fund we bring out." -By Thomas D. Lauricella; 201-938-2129; Thomas.Lauricella@cor.dowjones.com