Good Week for Aggressive Funds;Navellier Loses Round in Fund Battle

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By Alex Berenson
Staff Reporter

And the worst were first. At least for one week.

Long-suffering aggressive-growth mutual funds led the pack in the five trading days ended Thursday, according to data from fund tracker

Lipper Analytical Services

.

And after an ugly March, most funds benefited from the U.S. stock market's bounce Friday and Monday (April 4 and 7), with the average U.S. diversified fund up 1.6% for the week. Out of more than 2,600 domestic diversified funds, only 40 lost money, while 180 gained more than 3%, and the average small-cap fund gained a strong 2.3%.

Of course, Friday's 20-point burnoff in the

S&P 500

probably cost most funds whatever they made last week, and then some. But data that include Friday's close won't be available until next week.

The most recent data show that momentum players finally reversed their downward slide last week. The biggest winner among domestic diversified funds was

Keystone Hart EMG Growth

(HRTLX)

, which gained 5.6% last week. Other funds at the top of the charts included

PBHG Emerging Growth

(PBEGX)

, up 5% for the week, and

American Century: Twentieth Century Giftrust

(TWGTX) - Get Report

, which gained 4.9%.

But in a sign of the problems high-growth funds have faced in 1997, PBHG Emerging is still down 19.2% for the year, Giftrust is off 17.9% and Keystone Hart is down 11.2%.

Among other big names:

Fidelity Magellan

(FMAGX) - Get Report

, the $52 billion granddaddy, gained 1.2% for the week, though it's still off 0.4% for the year. And crowd favorite

Vanguard Index: 500 Portfolio

(VFINX) - Get Report

gained just 1.1% for the week to rank in the bottom third of all funds.

In a strong week across the board, winning categories among specialty funds included the science and tech funds, which gained an average of 3%, and biotech/health-care funds, which gained 2%.

The bottom of Lipper's list was peopled by bear market funds like

Rydex Ursa

(RYURX) - Get Report

, which lost 1.3%, and David Tice's

Prudent Bear

fund

(BEARX) - Get Report

, down 2.1%. But one aggressive-growth manager could also be found at the bottom. That was Garrett Van Wagoner, whose flagship

Emerging Growth

(VWEGX)

fund tumbled 1.3% for the week and is now down an ugly 21.4% for the year.

Outside the U.S., losers for the week included Japanese funds, which dropped 3.5%, and international small-cap funds, down 0.6%. The biggest winners included Latin American funds, up 3%. Latin American markets are traditionally tied closely to their U.S. cousins.

*****

The three outside trustees who fired Louis Navellier as manager of his

Aggressive Small Cap

fund

(MASCX)

last month now have ousted Navellier and his fellow portfolio manager Alan Alpers as fund trustees. The trustees replaced Navellier and Alpers with an officer of

MFS

, the Boston fund firm that the trustees picked in March to run the fund.

Navellier and Alpers had sought a temporary restraining order so they could remain as trustees, but a California judge denied their request on Thursday, according to MFS.

The fund's shareholders must still decide whether to retain MFS as their manager or return control of the fund to Navellier in a proxy vote. MFS spokesman John Reilly said Friday that if shareholders do decide to give MFS control of the fund, the fund will remain independent and won't be folded into another MFS fund. But the independent trustees will be replaced with the trustees who oversee other MFS funds, Reilly said.

A lawyer for Navellier was traveling and could not be reached for comment.

The fund, which had $163 million in assets last month, is now down to $86 million, according to Reilly. But he adds that outflows have slowed.