Dian's Column
Dian's Archive

Lavine/Liberman Archive




Lipper
Muriel Siebert & Co.


GOLF FUND



Like the wild life of birdies and eagles? Then here's a fund to tee off with.

Golf.

It's one of those sports that folks either love or hate. Many can't seem to understand the big to-do in chasing little white balls around acres of perfectly manicured grounds. For others, there aren't enough hours in the day in which to play.

But no matter where you stand, it's hard to ignore golf's popularity. That's why a money management firm in San Diego, Calif., has started a golfing fund. And for specialty funds like this one, the game is marketing.

"Currently there are about 27 million golfers in America, " says Jeff Provence, portfolio manager of the Value Trend Links Fund,(800-590--0898).

Statistics show the older golfers get, the more rounds they play. For instance, from the time people are 45 to 55, the amount of rounds of golf that they play doubles. "And then from 55 to 65, it doubles again," says Provence who has been playing golf since he was 12.

With statistics like that, and an aging Baby Boomer population, it's easy to see how this golf enthusiast came up with the idea to invest in golf and golf related companies. But are there really enough golf-related companies around from which one can create a mutual fund?

The short answer is "no".

However, if you really stretch the definition, it's doable. How? Include everything from the manufacturers of golf clubs to golf balls, clothing to carts, then expand that to include firms that support and sponsor golf tournaments and then add golf course property managements firms, i.e., REITs.

The universe that Provence selects from has about 150 stocks in it. Currently, he's got 33 stocks in the Value Trend Links Fund portfolio. That's on the high end of holdings as he likes to keep anywhere from 28 to 32 companies in the portfolio. About 50 percent of those stocks are companies that make golf stuff; the other 50 percent, golf sponsors and related industries.

The fund is managed with an eye toward momentum.

"You can't pigeon hole us as either a growth or value. If we see a company that may have a relatively high p/e, but their earnings are growth at a substantial rate, then we might consider them a great investment," he says.

One of the fund's top holdings is Charles Schwab. They've been in the fund since it's inception in January of this year and is a fit because Schwab is the official investment firm of the PGA.

Callaway, the No. 1. golf club manufacturer in the world and makers of those hearty Big Bertha clubs, is another holding. The company has also been developing a new golf ball that's expected to debut next year. Golf balls, it seems, can be a mighty profitable. "With more people playing golf, the more rounds played, the more balls lost, the more balls sold," says Provence.

You'll also find names like American Express and Fortune Brand in the fund.

Even though the Value Trend Links Fund did well during its first six months--it's performance was about par with that of the S & P 500's---year-to-date it's only up 1.06 percent, according to Lipper,Inc. Provence said that was due to a sell-off in Callaway and some of the financial stocks held by the fund. No matter what the reason, it's an indications of how volatile a focused fund can be.

For as great as the game of golf can be, as an investment, specialty funds---some call them gimmick funds---can be bogeys. One of the reasons is because their industry concentration adds risk to an already risky market place. So, if your game is golf, remember that the challenges you face on the course are only multiplied many times over in the market.

To read more articles, please visit the column archive.




[ top ]