Skip to Content
Premium Article

Smith Barney Premium Total Return Hangs Tough

Smith Barney Total Return wins by not losing much so far in 2001.

Mentioned:

This year's market hasn't been too kind to many funds, and Smith Barney Premium Total Return Fund (SOPTX) is one of the legions that are losing money so far in 2001. However, shareholders should count themselves lucky, because its losses aren't nearly as bad as those of most offerings so far this year; its 3% loss through April 6, 2001, makes it look positively robust compared with the returns of most large-cap funds.

That return also puts it well ahead of most domestic-hybrid funds, the category that this quirky fund is closest to fitting. Manager Ross Margolies keeps between 50% and 55% in stocks. That's a bit higher than his target when he took over this offering, but he reports that he is finding great values in the market. Margolies jumped into a bunch of retailers like Federated Department Stores (FD) and Safeway (SWY) late last year because he had a hunch that when interest rates fell, sales would increase. He has also been adding some busted convertibles into the fund's mix to drive up its yield. However, unlike some value managers, he hasn't been hiking the fund's tech exposure quite yet, because he thinks there's still room for that sector to fall a bit more.

This article is exclusive to Morningstar Premium members.

Start a 14-Day Free Trial

Catherine Hickey does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.