MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Monday, May 3, 1999 Susan Kaplan Although her investment management expertise is what brings clients to see Susan Kaplan, CFP, of Kaplan Financial Services, Wellesley, Mass., Kaplan stresses that she is, at heart, a financial planner. "We do comprehensive financial planning for all the clients we take on," she says. Today, Kaplan has 125 clients and $225 million under management -- 80% in mutual funds and 20% in stocks. Her broker dealer is Linsco Private Ledger and Pershing is the clearinghouse where assets are held. Although growth stocks have been the stars in recent years, the Legg Mason Value fund (LMVTX) has been a core holding in Kaplan's portfolios for three years. What she likes about the fund, particularly given the market's recent volatility, is that the manager, William Miller, has been at the fund's helm since 1982. "We're going to see a lot of volatility this year and the fact that Miller has outperformed his peers for years shows he can weather the storm," she explains.
While Kaplan notes that Legg Mason Value has characteristics typical of a value fund -- more than 30% is invested in financials, concentrated on money center banks like Chase Manhattan and Citigroup -- there are qualities that set it apart from its peers. For example, America Online is the fund's number one holding, accounting for more than 10% of the portfolio. "Several years ago when AOL was in trouble with heavy traffic, its stock prices plummeted and Miller bought a lot of it -- that's what value managers do. Now, just by virtue of the stock's growth, AOL is the fund's number one holding. Another surprise name is Dell Computer," explains Kaplan. "The fund's stability comes from mainstream, blockbuster names like Berkshire Hathaway and Storage Technology. So, even when we have a day that's bad for the Internet, the fund does not swing around in a very volatile way." Kaplan has not met in person with Miller and relies, instead, on conference calls. When all's well with a fund, she makes quarterly calls to fund managers. If, however, Kaplan's considering purging a fund from her portfolios, she prefers monthly, even weekly, conversations. "Sometimes the portfolio manager is making some kind of strategic shift that will ultimately be good for the fund, but results in a couple of quarters of low performance. For that reason, you can't jettison the fund just because it's lagging its peers. You must first find out why," she explains. Conversations with managers are worth more to Kaplan than fund companies' glossy brochures. Says Kaplan, "When I'm putting a fund in someone's portfolio, I go over the Morningstar sheet, the Value Line analyses and the Ibbotson research pages. I never use the companies' brochures because I am looking to compare a fund with its peers and the beautiful brochures don't do that." Kaplan says what she wants from fund companies is more hard data. "When you invest major assets with some fund companies, they'll ask you what would be helpful. I generally ask them for some of the Ibbotson charts to share with my clients. The charts are expensive, $25 each, but that's a better use of the fund company's money and my clients' time," she says. In closing, Kaplan suggests that fund companies rethink their production and distribution of expensive brochures, particularly given that investors now operate in supermarket settings. "The lack luster funds will never provide a Morningstar sheet, so I suppose I'm suggesting a strategy for the leaders in the pack," she concludes. Printed from: MFWire.com/story.asp?s=24814 Copyright 1999, InvestmentWires, Inc. All Rights Reserved | ||||||||||||