is adding to its already eclectic fund line up by launching three new funds.
According to a release, Franklin is offering three new funds:
Small Cap Growth II
Managers of the Technology fund say they will invest in all sizes of companies, focusing on services, software, hardware, telecommunications, media, semiconductors, health care technology and biotech. The fund will also invest overseas, though current plans are to deploy just 15% of its asset base there.
The small-cap offering is fairly straightforward and will be managed in a style similar to the $14.2 billion
Small Cap I
, which closed to new investors on April 30. That fund has fared well and was up 97% in 1999, but has seen a hard reversal of fortune this year, losing 9.4% in the past month alone. It's up 3.1% year to date.
While the offering will be managed by the same team -- Ed Jamiesom, Mike McCarthy and Aidan O'Connell -- as its predecessor, it won't be a clone because securities will be purchased at different times. But it will follow the same parameters, investing in companies with market cap of under $1.5 billion or in line with those of the
The most unusual offering of the lot is the Long-Short fund, which tries to protect investors against market volatility. Managers go "long" stocks they think will outperform and short those they think are overvalued.
It's hard to say whether these new offerings will give Franklin the shot in the arm it needs. The company is coming off a year of outflows for 1999 and continues to bleed assets. The San Mateo, Calif.-based firm saw outflows of $7 billion last year and has lost $2.4 billion so far this year, according to Boston's
Payden & Rygel Goes Globetrotting
Hoping to leverage its highflying
European Aggressive Growth fund,
Payden & Rygel
is coming out with a
World Target 20
fund, a focused offering that will look for investments around the globe.
Company officials say the new offspring in its fund lineup will focus on mid- and large-cap names particularly in Europe, Hong Kong and Taiwan. As its name implies, it will have a limited number of stocks.
So far, the Los Angeles-based company has fairly good luck in Europe. That fund is up 20.8% year-to-date, according to
. It has outperformed 95% of its European stock fund peers.
Ivy International Has Grand Reopening
After snagging international portfolio manager Sheridan Reilly from
Scudder Kemper Investments
funds are reopening the
Ivy International Fund to new investors. Its former portfolio manager, Hakan Castegan, has departed, though Ivy MacKenzie won't say to where.
The offering has focused on undervalued stocks in Europe, particularly in the energy sector. In the past year, while Japan was on a tear, it hasn't gotten shareholders much from this strategy. The $2 billion fund significantly lagged behind its foreign stock peers, continuing that negative performance into this year.
Reilly's numbers aren't stellar, but he's done better than Castegan. At
Scudder International Growth & Income and
Kemper International Growth & Income
AARP International Stock Fund
, he and his co-manager underperformed, but still racked up gains of around 15% for both offerings.
At the AARP International Stock fund, Reilly came within striking distance of his peers. That fund finished 1999 up 35.7%, still lagging the international stock category by eight percentage points.
GE Asset Management Unveils Concentrated Funds
After struggling to attract investors,
GE Asset Management
is getting attention for rolling out a few stock funds on Monday.
Three of the four new funds are concentrated, meaning they take bigger stakes in relatively fewer stocks. While the big-bet strategy has helped the likes of
Janus Twenty post fat returns, it also entails significant risks if those bets nosedive.
The new concentrated funds are:
Premier Research Equity
Premier International Equity
Premier Value Equity
. Each will invest in 30-35 stocks; The average domestic stock fund invests in about 140 stocks. The new funds will focus on any particular sector.
The fourth new fund is an S&P 500 Index fund.
Premier Research Equity might be the most interesting of the bunch. "Research" funds empower analysts to run a fund by committee, under a senior manager's supervision. Broker-sold fund giants
MFS Funds and
Putnam Investments have had success with similar funds, focusing on mid- and large-cap growth stocks.
The foray into more focused investing is a departure for
, which launched its fund family in the mid-1990s as an extension of the firm's $112 billion Richmond, Va.-based institutional management arm. GE has run its own pension fund since 1927.
The firm has had a hard time getting investors' attention, partially because its other 17 funds primarily reflect its institutional roots: They're solid, but vanilla. Only five of the funds have broken through the $100 million asset barrier, which is commonly referred to as a fund's break-even point.
When bought through a broker, the three concentrated funds each levy sales charges, or loads. In that case, the funds charge a maximum front-end load (or sales charge) of 5.75% for Class A; up to 4% on the back-end for B shares; and a back-end load of 1% on C shares.
But you can also skip the load by buying them online through the firm's
Web site. The new index fund is no-load through either the direct or broker-sold channel.
The concentrated funds' Class A shares charge below-average annual expenses, according to
. But their Class B and Class C shares charge more than their average peers. The index fund's expense ratio is 0.70%, which is high compared with the 0.18% charged by
Vanguard 500 Index.
MFS Launches Telecom Fund
After launching a
fund last month,
is planning to set up a telecommunications fund. But the question remains whether the Boston company will be jumping into last year's hottest sectors after they've cooled off.
The $150 billion broker-sold giant intends to launch
on June 27, according to filings with the
Securities and Exchange Commission
and company spokesman David Oliveri.
John Lathrop will run the telecom fund. He has worked at MFS since 1994 and has managed
Large Cap Growth for a little more than a year. Over the past 12 months, the fund is up 34%, beating his average peers and trouncing the S&P 500 by more than 25 percentage points, according to Morningstar.
The telecom fund has been incubated, or quietly managed and only sold to MFS employees, says Oliveri. The fund's inception and performance weren't immediately available.
The two new sector funds contrast with MFS's reputation among brokers as a core, diversified growth manager. They could indicate a grudging nod to investors' record-setting hunger for tech sector funds last year.
record amounts of money at hot-performing tech funds last year, forcing many fund shops to develop sector funds in order to stay competitive. Unfortunately, now that many of those funds are rolling out, the sectors aren't that hot anymore.
Last year, the average tech and telecom funds were up 135% and 73.8%, respectively, according to
. So far this year, however, both are underwater. Telecommunications funds are down 4.4% this year through April 27, according to Lipper.
The new fund might be a tough sell. Investors may have clamored for tech funds last year, but now that the sector has hit a rough patch, MFS is offering a
boosted payout to select brokerages in May as a sales incentive.
The new fund won't be the cheapest on the shelf. The new funds' Class A shares will levy a maximum 5.75% front-end load or sales charge. Class B and Class C shares will charge a maximum 4% and 1% back-end loads, respectively. The fund's Class A shares' annual expenses are 1.25%, compared to Class B and Class C shares' higher 2.25% expenses. The average communications sector fund charges 1.49%, according to Morningstar.
RS Rolls Out New Callinan Fund
RS Aggressive Growth
, a new all-cap growth fund run by Morningstar Manager of the Year Jim Callinan, launches today.
previewed the fund on Feb. 22.
Callinan is best known for running
RS Emerging Growth, a small-cap growth fund that returned 183% last year, thanks to a hefty bet on technology. So far this year, that bet has held the fund back. Since Jan. 1, it's down 3.2%, and over the past month the fund has lost nearly 19%. Callinan trails his average peer over both time periods, according to Morningstar.
As originally published, this story contained an error. Please see
Corrections and Clarifications.