0919881955

Manning & Napier to Beat S&P 500 for Eighth Year on Tech Stocks
Thu - Bình Thạnh 0919881955
By Danielle Kost
Nov. 22 (Bloomberg) -- The Manning & Napier Pro Blend Maximum Term Series Fund is joining the handful of mutual funds that are beating the Standard & Poor's 500 Index for an eighth straight year.
The Manning & Napier fund's investments in computer-related companies including Cisco Systems Inc., Research in Motion Inc. and EMC Corp. helped produce a return of 19.3 percent, exceeding the S&P 500's 12 percent gain.
Manning & Napier is one of 10 ``large-company'' mutual funds to outperform the benchmark U.S. index since 1999, according to Chicago-based research firm Morningstar Inc. The longest streak is held by Bill Miller, whose $20 billion Legg Mason Value Trust topped the S&P 500 for 15 consecutive years. That record is on the verge of ending, with Miller's fund up 4.4 percent so far in 2006.
``We don't view this as a horserace,'' said Patrick Cunningham, a managing director who supervises the eight-person team overseeing the $303 million Manning & Napier fund in Fairport, New York. ``It's fun to talk about, but our charge is to stick to our disciplines.''
The fund's advance ranks second this year of 197 funds tracked by Bloomberg with at least $250 million of assets that invest in companies with above-average earnings growth. The $850 million Thornburg Core Growth Fund, run by Alex Motola of Thornburg Investment Management Inc. in Santa Fe, New Mexico, is first, with a 19.4 percent return.
Tech Stocks
Cunningham's team raised its bets on tech stocks in the past year as companies upgraded equipment to take advantage of productivity gains from new software and services. Tech stocks accounted for 18 percent of the Manning & Napier fund as of September, up from 11 percent 12 months earlier. Miller's Legg Mason fund had 20 percent invested in information-technology companies at the end of September.
Miller's Value Trust lost money this year from investments in Seattle-based Internet retailer Amazon.com Inc., online auctioneer EBay Inc. of San Jose, California, and search-engine provider Yahoo! Inc. in Sunnyvale, California, which plunged 30 percent. Miller declined to comment on his fund's performance.
By contrast, the Manning & Napier fund added to holdings of network-equipment manufacturer Cisco of San Jose, California, and bought shares of Waterloo, Ontario-based Research in Motion, maker of the BlackBerry Internet handset, and business-computer company EMC in Hopkinton, Massachusetts.
Shares of Cisco and Research in Motion rose more than 50 percent this year, and EMC gained 17 percent since the end of the second quarter, when the stock was added to the Manning & Napier fund.
`Different Animal'
The Manning & Napier fund also has 8.3 percent of its assets in energy companies, including Schlumberger Ltd., which are among the stock market's best performers. Miller has said he regretted avoiding the industry as the price of crude rose to more than $70 a barrel this year from less than $20 in 2002.
Russel Kinnel, director of fund research at Morningstar, said the Manning & Napier fund has five times as many holdings as Miller. The managers also make more trades than Miller, he said.
``It's clearly a different animal from Miller's concentrated portfolio,'' Kinnel said.
Morningstar gives the Manning & Napier fund its highest five-star rating. It has a Sharpe ratio of 1.52, compared with the average 0.96 for similarly managed funds, according to Morningstar. The greater a fund's Sharpe ratio, the better its risk-adjusted performance.
Cunningham, 51, said his managers typically look for companies with market values of more than $7.5 billion that trade at discounts to their estimated cash flow and earnings, and have problems that the managers perceive as temporary, such as a business disruption caused by a natural disaster.
Blackberry Suit
The Manning & Napier fund first purchased stock in Research in Motion in March, when the company settled a patent lawsuit that threatened to shut down Blackberry service in the U.S. It bought shares for $70 to $80 each and sold them at $100 to $110 in October. The stock had been the fund's fourth-largest holding in September.
``There was some litigation scare,'' said Cunningham, who has a bachelor's degree in biology from the Massachusetts Institute of Technology in Cambridge, Massachusetts. ``We felt that would abate and their subscription rates would go up. We're looking for the strongest survivors.''
Cunningham joined Manning & Napier in 1992, and the Pro Blend fund's team has worked for the firm 12 years on average. The company oversees a total of $13 billion.
The fund raised its stake in Cisco by almost a quarter to 212,275 shares after the stock dropped a cumulative 29 percent in 2004 and 2005. It bought EMC as the company's stock slid 20 percent in the second quarter, the most of any member on the S&P Computer Storage and Peripherals Index.
Miller has 1.4 percent of his fund's assets in Cisco, and he doesn't own EMC.