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Cash Is King for Federated Kaufmann

Federated Kaufmann Fund keeps 20% on ice, trounces peers.


Federated Kaufmann Fund's (KAUFX) snazzy relative performance in 2001 is due in no small part to its outsized cash stake recently. Management reported recently that at the end of 2000, it was keeping nearly 30% of assets in cash. Though it has brought that big cash position down a bit by nibbling at some new investments in the new year, cash still stands near 20%. This has undoubtedly helped performance in a year in which the average money-market fund has outshone most stock funds' returns. And indeed, the fund's minimal loss so far in 2001 puts it in the mid-growth category's top decile.

Managers Lawrence Auriana and Hans Utsch have found a few places to put some of that cash lately. They bought more shares of Cendant (CD), a longtime holding that the duo took heat for owning when the company's management came under fire for iffy accounting practices a couple of years ago. Also, they added to the portfolio's health-care stake. The duo started a position in IDEC Pharmaceuticals (IDPH) and added to Cardinal Health (CAH)

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