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Evergreen Utility & Telecom Slows Down

Revved-up Evergreen Utility & Telecom struggles in tough market.

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Evergreen Utility & Telecommunications Fund (EVUAX)'s manager, Doris Kelley-Watkins, souped up this fund's portfolio in 1998, when she added more telecom and wireless names into its mix. That move worked out well in 1999, when growthier utilities funds left their more-conservative peers in the dust. More recently, however, this fund has been fighting an uphill battle. Its 7% return in 2000 was good enough to land it just above the utility category average, but in 2001, it looks pretty lackluster relative to its peers.

Indeed, the fund has been shellacked in the last 12 months by holding some of the racier names that led it to great heights in 1999. That doesn't mean that Kelley-Watkins is giving up on those stocks, though; she still believes that companies like Qwest Communications (QWST) will grab more market share in the networking and broadband industries in the next few years, so she's riding out their losses this year. Kelley-Watkins has hedged her bets a bit, though, by adding to independent power producers like Dynegy (DYN). She says power shortages aren't just a California phenomenon, and continuing shortages across the country will make for great demand for these firms.

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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.