The Feeling Is Mutual

A bevy of black-managed mutual funds is bringing new investors into the market, B.E. checks out what they have to offer.

a large-cap value manager, Randall Eley approaches the stock market’s biggest companies looking for bargains. The proof is in his portfolio: currently he’s invested in stocks with an average P/E of 16 compared to 20 for the S&P 500. And at a time when the market has rewarded large caps handsomely, Eley’s done quite well; at the end of June, Profit Value was up 24.41%, and 16.5% from the fund’s start mid-November of last year. Eley’s also a stickler for dividends. “Rising dividends are a sign that management is confident in the state of business,” he says. Eley’s penchant for high-yield stocks is reflected in Profit Value’s 3% average yield, compared to under 2% for the S&P 500. Looking for a combination of high yield and low price, Eley has gra
vitated this year to oil stocks like Chevron and Exxon, in addition to 3M and International Paper.

Victory Lakefront 800-539-3863
Big stocks made big gains early this year, helping Nathaniel Carter’s Victory Lakefront fund reap a 14.97% total return since its launch in March. Carter’s penchant is for cheap, large-cap stocks whose P/E trails the overall market’s. That’s brought capital goods stocks like Deere and Caterpillar into the portfolio. And despite the value label, Carter shops the technology sector whenever a bargain’s around. An example: Computer Associates, which Carter rode from a share price of $45 to $68.
The following two funds are managed by Maceo Sloan and NCM Management.

SUBADVISED FUNDS
NCM Capital Management Calvert New Africa Fund 800-368-2748
If you read our story on investing in Africa in May (“Returns from the Motherland”), New Africa’s no stranger. During its first few years, the fund ran into a rough patch, losing 11.55% last year when its heavy stake in South Africa got clobbered by a currency devaluation. This year, the tables have turned, and New Africa is up 18.22%, thanks to a rebound in the Johannesburg exchange and a solid rally in countries like Zimbabwe. The fund has had an average annualized total return of 3.13% since its inception in April 1995.
Dreyfus Third Century Fund 800-373-9387

As a large-cap growth fund, Third Century shops for big names with a little spice–earnings momentum. The fund, up 29.82% year to date, following a 24.33% total return last year, searches the market for companies with 20% or greater earnings growth, but also looks for momentum plays or companies where the increases in profits are actually accelerating. Currently, big holdings include money center banks like Bank America and Citicorp, as well as pharmaceutical giants Johnson & Johnson and Merck.

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