If nearly all mutual fund investing boils down to two main objectives - growth and income - neither one has come easy in 1994.
Just ask Lynn Yturri, who manages both the One Group Large Company Growth Fund and the One Group Income Equity Fund in the $9 billion family of funds advised by Banc One Investment Advisers Corp.While the growth fund managed a gain of 6.2 percent and the income fund 2.8 percent for the first nine months of the year, "the market has been very difficult," Yturri acknowledges.
Through the 1980s and early '90s, he noted in an interview, "we've had a long bull market that exceeded anybody's expectations. That's not likely to happen in the rest of the '90s. Single-digit returns are probable, and you have to be satisfied with less.
"What we're in is not a bullish market and it's not a bearish market. It's a mixed market, and our bet is that it will probably last for several years."
That sort of climate puts a premium on a manager's stock-picking skills, Yturri says, and it calls for "a defensive strategy but not a bearish one."
Yturri, who has some 25 years of investment management experience to draw on, previously worked for an Arizona bank that was acquired in 1993 by Banc One, which is headquartered in Columbus, Ohio. He has kept his base of operations in Phoenix.
Since he took the helm of the income fund last year, Yturri has diversified its portfolio with a "barbell" strategy - splitting its holdings between some 25 stocks with high current yields, and 25 more that yield much less but offer what he sees as good total-return prospects.
More than half the total-return stocks have gained ground in 1994, Yturri relates, while 21 of the high-yielders have declined along with bonds in the face of rising interest rates.
"That just tells you the pressure that's been placed on these interest-sensitive issues," he observes.