T. Rowe's Gensler Smells Cash in Telecom

If the mutual fund world had a comeback-of-the-year award, communications funds would surely be in the running.

After being left for dead in the wake of the bubble's collapse, telecom funds showed a strong bounce last year. But unlike a lot of other fund categories that rebounded in 2003 only to lose momentum in 2004, communications specialty funds have maintained their gains. The average fund has returned 18.1% this year, making it Morningstar's fourth-best performing group. The sector finds itself behind natural resources, real estate and utilities funds -- three obvious all-stars in the current low interest rate, high oil price environment.

Robert Gensler, portfolio manager of the $766 million (PRMTX Quote)T. Rowe Price Media & Telecom fund, says the group is entering a postbust reality phase. To him, this means these stocks are finally being appreciated for their ability to generate cash. ...