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Greenspring Fund Rides High

Slew of busted converts helps in 2001.


Greenspring Fund (GRSPX)'s eclectic portfolio is delivering the goods so far in 2001. Its return so far this year, which tops the domestic-hybrid category, stems to a great extent from manager Chip Carlson's stake in busted convertibles, or converts that behave more like bonds because the underlying stock is so cheap. Carlson says some of the busted converts he owns yield as much as 17%, and though many of them are companies in the tech sector, Carlson is picky about what he owns. He likes profitable firms that he thinks have great balance sheets and solid growth potential. A few semiconductor makers, like TriQuint (TQNT), fit that bill.

In the meantime, Carlson has trimmed some natural-gas stocks, such as Kinder Morgan (KMI), that rocketed to great results last year. However, he's hanging on to a sizable stake in most of them, because he still thinks natural-gas companies' results will exceed expectations and that consolidation will continue in that industry. But he's not adding to much on the stock side; cash sits at 13% these days.

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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.