Al Frank Fund Goes No-Load
- Alan Lavine and Gail Liberman
Al Frank is making it easier for investors to get in on his stock picking action. He is converting his Al Frank Fund to a no-load fund from one that charged a 5.5 percent front-end commission.
That move can save investors a lot of money. Fifty-five dollars for every $1,000 invested was a commission.
That's a break. Frank has a reputation as a good stock picker. He searches far and wide for undervalued and overlooked stocks with good future earnings potential.
Frank's monthly newsletter, "The Prudent Speculator," is rated the number one investment newsletter for the past 10, 15 and 20 years, according to the Hulbert Financial Digest.
The Al Frank Fund, which invests in small company stocks, has grown at a 1.14 percent annual rate over the past three years. That's not bad in a bear market. The S&P 500 has declined at about -16 percent annually since 2000. This year, however, the fund hasn't done well. It is down -27 percent, according to Morningstar Inc., Chicago.
John Buckingham, research director for the Al Frank Fund, is optimistic about the outlook for undervalued stocks.
"We believe now is an excellent time to invest in equities," Buckingham says. "We have just entered the seasonally favorite November though April period when stocks historically perform well. The bear market has also provided great buying opportunities."
In addition, Buckingham says that 2003 is the third year of a presidential election cycle. There has not been one down year since 1950 in the third year preceding a presidential election year.
The fund has 23 percent of assets invested in software, hardware, telecommunications and media stocks. The rest is invested in services and manufacturing companies.
The fund's largest holdings include: Sei Daily Income, InVision Tech, Jo-Ann Stores, American Biltrite, Jameson Inns, Allied Research, Michaels Stores, Central Garden and Pet, Cysive and Vintage Petro.
Although the trends look favorable, higher stock prices are not a sure thing. There is uncertainty about the economic recovery and a war with Iraq. In addition, some economists are concerned that a large budget deficit and the declining value of the dollar could spur higher inflation and interest rates. Plus, it is not a sure thing that undervalued stocks will outperform growth stocks in the next bull market.
Alan Lavine and Gail Liberman are husband and wife columnist and authors of The Complete Idiot's Guide To Making Money With Mutual Funds, (Alpha Books).
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