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Eight money managers examine portfolio management strategies in the latest Issue of The Wall Street Transcript available at (212/952-7433) or http://www.twst.com/info/info592.htm

TWST: What is the investment philosophy behind this Fund?

Ms. Ellis: The Dynamic Fund is a small cap growth product that just reached its five-year inception mark and it has been in the top quintile for the five years. Our mission is to deliver risk and return characteristics that match the asset class. The investment philosophy and discipline of the portfolio incorporates a two-part approach. We start with a disciplined portfolio construction process, and follow that with a rigorous bottom-up stock selection process. We align our product with the benchmark that represents the small cap growth asset class. We use the S&P 600 Barra Growth Index, and we diversify our Fund in line with the sector diversification of that benchmark. By mandate, we stay fully diversified in all those sectors and have a maximum deviation from that sector weight of plus or minus 350 basis points. We stay fully invested at all times with a maximum cash level of 5%. We try to stay in the 0%-3% range at any given time. Part two identifies what we consider to be excellent companies within the universe by looking at three characteristics: attractive fundamentals, a valuation that offers upside, and an attractive timeliness profile (which we measure by reviewing the technicals of a company’s stock chart).

TWST: Discuss some of these stocks that illustrate your strategy.

Ms. Ellis: I’ll give you some examples of companies that we have purchased in the last quarter. Let me start with a company called Odyssey HealthCare (ODSY), based in Dallas. There are many strong advantages here, not the least of which is that reimbursement is quite favorable. In terms of cost advantage, it is much more cost-effective than a hospital setting. Another company is Coinstar (CSTR), which is based in Washington. They are an automated coin counting machine company, available nationwide, and the machines are typically in a grocery-store setting. They take an 8.9% processing fee to take your pennies, nickels, and dimes that you save in a jar and convert them to vouchers for cash or groceries. They have demonstrated very rapid growth. They have relationships with 19 of the top 20 supermarkets, presence in 46 states and they’re expanding internationally. They have very strong internal revenue growth through a number of sources. First, this area is under-penetrated, such that their opportunity from growth comes from new users at existing locations. As more people have come to understand that they can take that bucket of pennies and turn it into paper currency, the repeatability of the existing customers has reached the 85% range. Their strengths include new customers to existing locations, new locations in the United States (with the potential for 2,000 more machines in the US), and expansion abroad. Also, what is not at all priced into the stock is the opportunity to use the intelligent software that exists within these machines, similar to ATMs, for alternative products. In beta right now are prepaid debit cards. More opportunities include phone cards, and the buying and selling of entertainment tickets. They have a very strong management team that manages profits and revenue growth. Based on my earnings estimate next year, I have 40% upside on the stock today.

1) Juliet S. Ellis, a Managing Director & a Senior Portfolio Manager at JPMorgan Fleming Asset Management, examines portfolio management strategies in this timely and deeply informative 4,400-word interview from The Wall Street Transcript.

2) Mark N. Odegard, a Partner, Research & Portfolio Manager with Skyline Asset Management, examines portfolio management strategies in this timely and deeply informative 4,100-word interview from The Wall Street Transcript.

3) H. Giles Knight, a Managing Director at Allied Investment Advisors, examines portfolio management strategies in this timely and deeply informative 3,000-word interview from The Wall Street Transcript.

4) Robert S. Venable, Chief Investment Officer for First American Capital Management, examines portfolio management strategies in this timely and deeply informative 4,400-word interview from The Wall Street Transcript.

5) David K. Willardson, a Portfolio Manager & Lead Analyst at First American Capital Management, examines portfolio management strategies in this timely and deeply informative 4,400-word interview from The Wall Street Transcript.

6) Jack P. Phelan, the President of Helios International Asset Management Inc., examines portfolio management strategies in this timely and deeply informative 3,300-word interview from The Wall Street Transcript.

7) Jospeh Marini, a Portfolio Manager for Cabot Money Management, examines portfolio management strategies in this timely and deeply informative 6,200-word interview from The Wall Street Transcript.

8) James E. Manley, founder of Atlantic-Pacific Capital, Inc., examines portfolio management strategies in this timely and deeply informative 2,500-word interview from The Wall Street Transcript.