Question: With so many financial newsletters available, is there a master listing of them so the investor can pick and choose? I'm especially interested in finding one that features company spinoffs. Any hints, sources or ideas? -- L.S., via the InternetAnswer: There is a publication that gives all investment letters a level playing field on which to be compared.
The 20-year-old Hulbert Financial Digest, 5051B Backlick Rd., Annandale, VA 22003 (888-HULBERT) tracks the performance of 165 investment letters, using a hypothetical $10,000 portfolio to gauge their individual success. An annual subscription to that newsletter costs $135.
"A good rule of thumb is not to pay attention to performance for a period shorter than five years, since only long-term performance has statistical validity," advised Mark Hulbert, editor of the newsletter that bears his name. "We also look at the risk that has occurred in the process of achieving a specific return, so that we can provide the newsletter's risk-adjusted performance."
An investor interested in a newsletter should take out a trial subscription and examine it closely, said Hulbert. Even if it has the best results, it may not fit your own personal approach. Furthermore, newsletters differ a great deal in the sense that some also have a telephone hotline, Web site or other features.
Regarding spinoffs, there is a monthly publication, but it doesn't emphasize investment picks for individual investors. The Spin-Off Report info@pcssecurities.com is a sophisticated research publication aimed at institutional clients. It includes a history of the parent company doing the spinoff, a description of the spinoff transaction and a report on the tax and shareholder implications.
Question: I'm a retiree with income only from Social Security and individual retirement account withdrawals. To diversify the mutual funds in my IRA, I'm considering a European stock fund. What's your opinion of the Scudder Greater Europe Growth Fund? -- L.M., Bensenville, Ill.
Answer: If you're optimistic about Europe, this fund is one of the better choices for that region.
Although Scudder Greater Europe Fund has declined in value in 2000 because of price declines in technology and telecommunications, astute stock-picking has made it a good performer since its inception in 1994. The $1.56 billion fund gained 19 percent over the past 12 months to rank in the upper one-third of all European stock funds. Its three-year annualized return of 21 percent placed it in the top 8 percent of its peers.
Lead manager Carol Franklin, taking a thematic approach, was early to take advantage of trends such as the move toward cellular telephones and restructuring of the financial services industry. The fund is also big on advertising and publishing names.
"This is an aggressive fund, so investors should expect some volatility, as well as underperformance if value investing comes back," cautioned Bridget Hughes, international fund analyst with the Morningstar Mutual Funds investment advisory. "In addition, because it has so many large-cap European names, it may not be much of a diversification move for someone who already owns a similar-performing large-cap U.S. fund."
Scudder Greater Europe Fund's largest country holdings are from France, the United Kingdom, Germany, the Netherlands and Italy. Its biggest groups are financials, manufacturing, communications and service industries.
Its largest holdings were recently Italian publisher Gruppo Editoriale L'Espresso, cell-phone maker Nokia, Italian bank Banca Popolare di Brescia, German electronics firm Siemens, French energy company Total, Spanish telecom services company Telefonica, Dutch telecom services firm United Pan-Europe Communications, German manufacturer Mannesmann, French advertising company Publicis and French engineering consulting company Altran Technologies.
This Boston-based "no-load" (no sales charge) fund requires a $2,500 minimum initial investment. It boasts a relatively low annual expense ratio of 1.48 percent.
Andrew Leckey answers questions only through the column. Address questions to Andrew Leckey, "Successful Investing," 98 Henry St., Dept. 183, Brooklyn, NY 11201, or by e-mail at successinv@aol.com