Sports Fans Get Their Own Mutual Fund
Yo, sports fans: If those late-evening World Series games haven't been enough to satisfy your penchant for sports - let alone scores of current football and hockey matches - there's always the world of mutual funds.Skip to next paragraph
Subscribe Today to the Monitor
That's right, on Aug. 1 "Sportsfund," a new mutual fund devoted entirely to the world of sports, began operations. The fund is part of the Forum family of mutual funds based in Portland, Maine.
The fund has posted a return of 6.6 percent in a little over two months, says fund president and co-portfolio manager Gary Miller. That trails the 9 percent gain in the Dow Jones industrial average during that same period.
Sports, for anyone who has not noticed the host of athletic contests on TV, is a multibillion enterprise in the US. Total market value for the sports/sporting-goods industry is somewhere between $20 billion and $50 billion, Mr. Miller says. Some independent studies suggest the amount may be much higher.
Sports-related companies range from makers of uniforms and personal equipment, such as baseball bats and balls, to power boats, airplanes, hang gliders, and even a few teams.
Miller has identified at least 169 major publicly traded sports-related companies in the US. The Sportsfund is now invested in 24 stocks, including Fountain Powerboat, National Golf Properties, Brunswick, Cannondale, Penske Motorsports, and Nike.
"All sector funds [such as Sportsfund] carry more risk than a diversified equity fund," precisely because they occupy a "narrow niche," says Michael Mulvihill, an analyst at Morningstar Inc., a financial services firm in Chicago.
On the plus side, "more people are now spending money on entertainment and leisure," he adds. But were there to be a recession, many families "might have to cut back on discretionary spending, which could have a negative impact on sports-related firms," Mr. Mulvihill says.
Among the major professional franchises in North America, only a handful are publicly traded, including basketball's Boston Celtics and hockey's Toronto Maple Leafs. A second hockey team, the Florida Panthers, recently said it would go public, while a third - the Anaheim Mighty Ducks - is owned by Disney.
Sportsfund has a maximum load, or sales charge, of 4 percent. The minimum investment is $1,000 initially, and $100 for additions. So far, only about $500,000 is invested in the fund.