Diversification, diversification, diversification
From The Wall Street Journal
International mutual funds may not be as diversified as they seem. A closer look at the results of many international funds shows strong similarities to what is fueling the performance in many US stock funds. Both are scooping up heavy numbers of technology and telecommunications stocks, and, while they generally aren't buying the same stocks, they are all potentially volatile. International mutual funds have boosted their exposure in particular to burgeoning software and Internet companies in Japan, Europe and India. So far in 1999, the typical US stock fund is up 16.75% year-to-date through Wednesday, while the average international portfolio is up an even more crowd-pleasing 33.28%, according to Morningstar Inc.
Time heals all wounds
Pilgrim Baxter's PBHG Funds were performing so poorly last year that an attempt by parent United Asset Management to sell Pilgrim Baxter fell through, largely due to its funds' poor performance. It's good that time heals all wounds because today, the firm's flagship Growth fund is approaching five-0 territory, returning 49.3% through Wednesday's close. And other PBHG funds are posting successful numbers as well. PBHG funds' resurrection comes as momentum investing is back in favor. The strategy involves buying explosive small- and mid-size company stock before other investors pile in, then getting out of them before those same investors bail.
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