Tom Maguire, manager of Safeco Growth, refuses to be pigeonholed into one investing style.
That's a rarity these days, when most stock funds buy either large or small companies and invest in either fast-growing companies or ones whose shares appear undervalued."I buy small cap, mid-cap, large cap, whatever," Maguire says. "I like to invest in stocks that go up."
In 1997 Safeco Growth (800-426-6730) returned 50 percent -- terrific, even for a year when Standard & Poor's 500-stock index returned 33.4 percent. This year, as of mid-November, the fund is down 3 percent.
Maguire, 44, picks stocks on their individual merits, rather than by first trying to identify broad economic trends. He looks for companies with growing sales and earnings. But, he says, "I don't like to pay a heck of a lot for them."
He generally avoids companies whose price-earnings ratios are higher than their projected rates of earnings growth.
"If a company can increase earnings 20 percent a year, I would buy it at a P/E ratio in the high teens," he says.
But Maguire's rule is not hard and fast. He'll buy stocks of large companies even when they're selling at a P/E higher than their growth rates. He also makes exceptions for beaten-down stocks he thinks are good turnaround candidates.
The result is something of a hodgepodge. He invests in big companies, such as Avon Products and tobacco giant Philip Morris. But he also owns gobs of small companies, particularly in the health and services sectors.
In his eight years at Safeco Growth, Maguire has hit a few potholes. The fund lost 15 percent in 1990, when the S&P 500 fell only 3 percent, and it lost 3 percent in 1992, while the S&P gained 8 percent.
"I've really had some stinkers," Maguire concedes.
The question now is how the ballooning size of the fund will affect its returns. This year's results aren't encouraging.
Assets stand at $1.7 billion, vs. just $334 million last September. Maguire has responded by buying shares of bigger companies -- and more of them.
Just last September, Safeco Growth had 93 percent of assets in stocks with a market value (share price times number of shares outstanding) of $1 billion or less. Now only half the stocks in the fund are that small.
And since September, the number of stocks in the fund has grown from 97 to 140.