We all know things like watching TV, chilling out on a Caribbean cruise or chugging an ice cold Heineken are enjoyable pastimes. But who'd have thought they'd be good long-term investments?
The INVESCO Leisure Fund is all about fun. It invests its assets in things like cable companies, casinos and cruise ships. You know, the kinds of companies that manufacture, produce or bring us the things we like to do during our spare time. And believe it or not, this fund has made its investors very happy campers.
Since its inception in 1984, the fund's average annual total return to shareholders has been 19.62 percent. But newcomers have nothing to complain about either. In 1998, for instance, the fund was up almost 30 percent. And as of March 31, the fund was up more than 10.7 percent for the year-to-date--well ahead of other funds in its category.
Mark Greenberg has been the fund's portfolio manager since February 1996. He's big on holding on to his picks and making big bets. For example, the annual turn-over rate for the fund in 1998 was a low 31 per-cent. At press time in March, every stock in the fund's top 15 had been there three months prior; the top 15 stocks make up about 55 per-cent of the fund's holdings.
The current hot property in the INVESCO Leisure Fund is cable. It's the fund's biggest sector weighting. "Liberty Media has been my largest holding for more than a year, and that stock doubled last year," says Greenberg. "MediaOne Group has gone up the same amount."
Greenberg plans to stick with cable for the long term. Why? Because people like watching television. "More people in the United States have TV sets than have indoor plumbing," he says.
One sector he didn't care much for a few years ago but is now investing in is casinos. While Greenberg has negative feelings about Las Vegas due to what he feels is an excessive number of hotels being built, he has been buying Harrah's stock. After looking at the various places the company gets its revenue (Harrah's profits aren't limited to its Las Vegas location alone), its current price and future projections, he figures it's a good long-term bet.
Anyone interested in the INVESCO Leisure Fund needs to remember a few investment basics. First, investing in any sector fund comes with additional risks because it is, by nature, not diversified. And second, past performance is no indication of what the fund will do in the future. Even Greenberg says, "If we get a big recession, will spending drop on these activities? Yeah. Like it will on everything else."
Dian Vujovich is a nationally syndicated mutual fund columnist and author of 101 Mutual Fund FAQs (Chandler House Press). For free educational mutual fund information, visit her Web site, http://www.diansfundfreebies.com
At A Glance
Fund name: INVESCO Leisure Fund [FLISX]
Managed by: INVESCO Funds Group
Portfolio manager: Mark Greenberg
Top holdings: Liberty Media, OmniCom Inc., Cie Financiere Richemont, MediaOne Group and Heineken
Total assets: $277 million
Average annual return: 19.62% (since its inception in 1984)
Total expense ratio: 1.41% with a 12b-1 fee of 0.25%
Minimum initial investment: $1,000 on regular accounts, $250 for IRAs
Phone: (800) 255-6927
Web site: http://www.invesco.com