Hello Ztect:
Look forward to your post tomorrow. Another lead for TSIG to pursue are INTERNET MUTUAL FUNDS. An investment in TSIG by one of the internet mutual funds could be a win-win for everyone.
Regards,
Phil
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Fund Watch Features: Net Funds:
Opportunity for Upstarts
By Alison Moore
Senior Writer
11/19/98 10:30 AM ET
Despite almost maniacal public interest in Internet companies
and a spectacular run-up in Net stocks this year, the biggest
names in the mutual fund business have yet to introduce any
funds dedicated to the Internet sector.
That's left the field wide open for some enterprising individuals
looking to start mutual funds.
Just $100,000 in fund assets, enough cash or connections to
draw up the legal documents and a dream will get you started.
The Web will take care of your marketing costs.
The result is a handful of Internet funds that, in some cases, are
long on promise and short on experience. Much like the Net stocks in which they invest. One such fund, simply named the Internet Fund, has gone from 12 to 1,200 shareholders since December, ballooning to $8 million in assets from $150,000. This impressive growth comes despite the fact that the fund's adviser, Kinetics Asset Management, is not listed in any phone directory; that the portfolio manager has never managed a mutual fund before; and that the president is a retired school superintendent who runs the fund's transfer agency and customer-service operations out of a residential neighborhood in North Babylon, N.Y.
Brainstorm on the Train Margaret Doyle is the retired superintendent-turned-fund president. The Internet Fund was devised by her son, Larry, and a friend during their morning train commute from suburban Tarrytown to New York's Grand Central Station. After filing the initial paperwork to get the fund off the ground, Larry Doyle turned the works over to Mom. "He thought it would be an activity for me," says Margaret Doyle. Larry is no longer involved with the fund, she said. The fund, launched in October 1996 and overseen by a private asset manager, chugged along with just a handful of investors -- mostly friends, family and her son's fellow commuters, says Doyle. But this year's bonanza in Internet stocks, coupled with the appointment as portfolio manager of an oft-quoted analys from IPO Value Monitor, has changed all that.
Ryan Jacob, 28, continued his work as research director for IPO Value Monitor when he took over as portfolio manager of the Internet Fund last December. During his two-year tenure with the IPO research group, Jacob was frequently quoted in financial publications including Barron's, The Wall Street Journal and TheStreet.com about the initial public offering market. Not long after he took the helm of the Internet Fund, the manager's new position was noted whenever he was interviewed, bringing plenty of attention to the sleepy fund. By August, Jacob says the fund had grown so large he had to quit the Monitor and focus full-time on the burgeoning portfolio.
Jacob, who had never before managed a mutual fund but had in previous jobs assisted portfolio managers with private accounts, says he believes it was primarily his experience as an analyst of emerging companies that attracted the attention of the Doyles. Now he not only picks stocks for the fund, he also handles the trades out of a New York office he shares with two other asset managers. The task is made easier by his buy-and-hold strategy, says Jacob. "I do trade myself, but it's pretty easy since I'm not that active -- I'm not looking to trade around these names."
Jacob says the fund's growth eventually will force the firm to expand, but for now the registered investment adviser to the fund is Jacob.
So how's the fund doing? It's up 114% so far this year, according to the company, which posts daily net asset values on its Web site. That would make it a front-runner among funds of its kind, but neither Lipper Analytical Services nor Morningstar -- the two best-known mutual fund trackers -- could locate the fund in their databases to confirm the number.
Other Net funds we know of also have had good runs this year, though none as spectacular as the Internet Fund.
Net Funds
Fund(InceptionDate)
Munder
NetNet
fund (8/96)
WWW
Internet
fund (8/96)
The
Internet
Fund
(10/96)
Monument
Internet
fund
(11/98)
The largest of the Net sector funds, and the only one offered by a fund group whose name you may know, is the Munder NetNet fund, managed by Munder Capital Management. The two-year-old, $125 million fund is up 57.1% so far this year, according to Lipper.
Michigan-based Munder, which oversees about $50 billion in both public and private accounts, offers 30 mutual funds. The NetNet portfolio is managed by a committee headed by Paul Cook.
Though not as big, the WWW Internet fund, which began in August 1996, has been around as long as Munder NetNet. The $2.9 million WWW Internet fund is the only mutual fund offered by Lexington, Ky.-based WWW Advisors. The portfolio is managed by Lawrence York and Jim Greene. The group, which also oversees private accounts, has a total of about $50 million in assets under management. The fund is up 20.6% year to date, according to Lipper.
Newest Net Fund
The newest of the pioneering Net funds is the $500,000 Monument Internet fund launched earlier this month. In its press release, the fund's asset management group boasted: "After nearly a year of specializing in picking stocks in the high-tech hotbed of Washington-Baltimore, the Monument Funds Group is going national with what will be only the fourth Internet mutual fund available to investors."
A somewhat inauspicious introduction, to be sure. But given the "anything goes" spirit of the Net and many of its early investors, not too surprising.
Washington, D.C.-based Monument Group -- which also manages private portfolios, retirement accounts and trusts -- began its mutual fund operation in January 1998 and now has three funds totaling $12 million in assets.
Whether you invest in a fund that comes from a company whose name you know (and can locate in the phone book), or in a tiny fund from a firm you may never have heard of, is up to you. The cost and level of service may differ, but all must comply with Securities and Exchange Commission rules.
Small funds and smaller firms, which lack economies of scale, often have higher expense ratios than bigger firms, says Gene Gohlke, associate director in the SEC's Office of Compliance, Inspections and Examinations. And that's indeed the case with these Internet funds.
Internet stocks have risen 83% so far this year, according to TheStreet.com Internet Sector index. That makes the Internet Fund's 114% return look pretty good compared with its peers. Though, as we pointed out, that number couldn't be independently verified. |
