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By Andrew Leckey
Unusual stock funds come and go.
In the "gone" category is the
Also history is the
Some unusual funds are whacky and some adhere to overly focused strategies. However, others work fine for investors seeking to add spice to predictable portfolios that had been formulated by the book.
And ideas for funds keep coming, even if they don't all get off the ground.
"I once talked with a woman who was researching chocolate companies and how they had performed historically, since they tend to outperform the Standard & Poor's 500 over a long time period," recalls Jack Bowers, editor of the independent Fidelity Monitor newsletter (www.fidelitymonitor.com) in Rocklin, Calif. "She was thinking that maybe there would be interest in launching a fund on that theme and doing all sorts of fun stuff with it."
That sweet fund didn't become a reality, but other unique concepts have come and are still around. For example, investors
distrustful of the shenanigans of our elected officials in Washington have a fund that invests in stocks only when
One unique fund that's gotten a lot of publicity, the
"There have been all kinds of strange industry-specific funds over the years, such as the legendary
Some quirky funds seem to speak to people who basically want to have something different in their portfolios, Kinnel expects. It is possible to run a mutual fund out of your basement these days, he noted. If it happens to have awesome returns, you will attract a lot of money in the beginning -- but it doesn't last.
"Lots of funds are hoping to capture lightning in a bottle," Kinnel said. "For example, there were all of those Internet funds at the turn of the century that were supposed to excel, and then in the dot.com meltdown they all got crushed."
Nonetheless, some unusual funds are viable investments.
A quirky name may draw attention.
Columbia Thermostat Fund Cl. Z (COTZX) uses a strategy that operates like a home thermostat. When the S&P 500 goes up in relation to predetermined ranges, the fund sells a portion of its stocks and invests more in bonds. When the stock index goes down, it increases its stock-fund investments. The premise might seem strange, but the fund has done quite well with a 12-month return of 19 percent.
Even a fund giant such as
The Fidelity 130/30
Some funds invest in unusual regions, noted Roseen.
For example, the closed-end
Bottom line: The key to any fund -- whether unique or run-of-the-mill -- is how well it performs.
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Investing - Unusual Stock Funds Intriguing, Still Judged on Performance | Successful Investing
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