Newspaper article THE JOURNAL RECORD

Market Watcher Places Bet on Micro-Cap Stock Funds

Newspaper article THE JOURNAL RECORD

Market Watcher Places Bet on Micro-Cap Stock Funds

Article excerpt

NEW YORK -- Robertson, Stephens & Co.'s Dave Evans is betting that if the market keeps climbing, micro-cap stock funds will pull ahead of their large-cap brethren.

"Clearly the micro-cap sector was hit hard in May, June and July," said Evans, who manages the new Robertson Stephens MicroCap Growth Fund. They didn't bounce back as quickly as larger stocks, but as investors started to come back to the market, "smaller companies benefited."

Evans's fund is up about 6 percent since it was introduced on Aug. 15, about even with both the Standard & Poor's 500 Index and the Russell 2000 Index, which is composed of smaller stocks. His fund is part of a fad among mutual fund managers for micro-cap funds. Besides Robertson Stephens, Oberweis Asset Management, Franklin Resources, Dean Witter Reynolds and Scudder, Stevens & Clark all started these puny-stock funds in the last year. Evans reckons his fund will continue to get a boost from the market. Despite the recent slide, when the Dow Jones Industrial Average fell to 5909 after briefly crossing 6000, Evans said he thinks stocks will continue to climb. "The market is increasingly driven by assets in search of a home," he said. Evans looks for companies whose earnings are growing at least 20 percent a year, although growth is generally closer to 30 percent or 40 percent, he said. He seeks out companies few people know about, and puts lots of faith in visits to the company and its management. "When you buy small companies, you are buying management," he said. Evans, who was once a recruiter for a college and a business school, uses those same skills when interviewing management, going with his gut feeling. He tells of spending time with one executive talking about his background and his reasons for being in the business. After 35 minutes of talking, he decided not to invest in the company. …

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