You’re Welcome
State Street Research Aurora Fund is preparing to join a growing list of small-company stock mutual funds that are reopening to new investors amid expectations that the bear market for these stocks might be nearing an end.
“The small-cap market is particularly attractive from an investment standpoint, with small-cap stocks trading at the lowest levels we’ve seen in the last 20 years,” said Troy Shaver, executive vice president of Boston-based State Street Research & Management.
The $400-million Aurora fund, managed by Rudy Kluiber, was down 21% so far this year as of Friday, whereas the benchmark index for small-cap stocks--the Russell 2,000--fell 17.1% in the same period.
The State Street Research Aurora Fund will reopen Oct. 1 and will accept new investments until Dec. 31 or when assets reach $750 million, whichever happens first, the company said Monday.
Four other small-cap mutual funds are reopening to new investors because their managers say they want money to buy stocks that recent market declines have made dirt-cheap.
The funds are the Oakmark Small Cap Fund, Wasatch Micro-Cap Fund and Wasatch Aggressive Equity Fund run by Wasatch Advisors Inc. and the Heartland Value Fund.
Meanwhile, the managers of America Asia Allocation Growth Fund are heading in the other direction, saying Monday that they plan to liquidate the mutual fund after seeing it attract less than $3 million in assets since opening almost two years ago.
“It’s been a difficult market environment, to put it bluntly,” said James Tso, the fund’s manager.
America Asia Allocation Growth’s performance has been hurt by falling Asian markets. The fund was down about 11% so far this year as of Friday, after declining 17% in 1997.
The fund, which invested about half its assets in shares of Asian-based companies and the remainder in shares of U.S. companies with business in Asia, will be liquidated Sept. 30. Investors will receive cash equal to what the shares they own are worth as of that date, Tso said. The fund’s shares closed Friday at $3.22 each.
