From the September 2002 issue of Entrepreneur

OK. OK. Even though it's been a horrible year for growth funds, don't count all of them down and out. Especially the ones that let computers pick their stocks.

The Hennessy Cornerstone Growth fund (HFCGX) is a quantitative fund (a computer screening program does all the hard work) with a lot going for it. First, it's a small-cap fund, and they've been hot lately. Second, it's got a value bent-another winning investment style these days.

"There's absolutely no room for emotions here," says portfolio manager Neil Hennessy. "After our screening process, what we end up with is essentially a value-oriented investment strategy with momentum."

That combo has proved positive. Through June 24, the fund was up 10.13 percent (while the average small cap value fund was up only 3 percent); last year, up 12.1 percent; in 2000, up 5.3 percent; and in 1999, up 37.7 percent. In fact, the fund hasn't had a down year since it began in 1977.

The Hennessy Cornerstone Growth fund portfolio holds 50 stocks, but be careful not to fall in love with any of them: Once a year, the portfolio gets "refreshed," which means the fund's turnover rate is typically 100 percent. So expect to see an annual tax bill. Unless, of course, you hold the fund in one of your qualified retirement accounts.

Toll-free number: (800) 966-4345
Web site:www.hennessyfunds.com


Dian Vujovich is an author, syndicated columnist and publisher of fund site www.diansfundfreebies.com.