Street Wise: Bottom-fishing by Seligman

Evidence that some people think the market’s wild ride is starting to settle down might be found in the recent launch of the Seligman Select Technology Trust (FSSTTX). The unit investment trust, which will be selling shares through July 24, was developed on the premise that the technology sector will produce some attractive valuations.

“You can make the argument that fundamentals a year from now will be better than they are now,” says Paul Wick, managing director of J. & W. Seligman & Co. Inc. in New York.

Mr. Wick was responsible for selecting the 35 technology companies that make up the portfolio, which will be left unchanged for 12 months after the fund closes to investors July 24. The fund has taken minimum investments of $1,000 since June 21.

The unit investment trust model, a first for Seligman, offers a fully invested portfolio and zero portfolio turnover.

Mr. Wick calls the tax benefits of this kind of portfolio “the No. 1 advantage.” But he also believes in the “secular growth stories” with which he has loaded the fund.

The two biggest holdings, each 6% of the portfolio, are Microsoft Corp. (MSFT) and Symantec Corp. (SYMC).

“We’re very optimistic that the way tech stocks are trading is moving back to our investment philosophy,” Mr. Wick says. “The notion that the perennially unprofitable companies will conquer the world is gone.”

VALUE AT CITIZENS

Value investing is coming to Citizens Advisers Inc.

According to a filing with the Securities and Exchange Commission, the Portsmouth, N.H., socially conscious fund family is preparing to take over the management and distribution of the Meyers Pride Value Fund (MYPVX), which screens for gay-friendly companies. The $15 million value fund, which led all mid-cap value funds ranked by Morningstar Inc. through the first half of the year with a 21.8% gain, is managed by Meyers Capital Management LLC in Beverly Hills, Calif.

Shelly Meyers, who has been managing the fund since its inception in June 1996, has agreed to manage the portfolio for at least five more years. The fund will be renamed the Citizens Value Fund, and Meyers Capital will act as the subadviser.

Catherine Hickey, a Morningstar analyst who follows socially conscious investing, calls the fund a good fit with Citizens’ other “go-go growth funds.” But she says there are likely to be portfolio changes as Citizens’ socially conscious screens are applied to the Meyers fund. The Meyers fund’s main focus is to avoid companies that cannot prove in writing that they do not discriminate based on sexual orientation.

Ms. Meyers says the sale to Citizens is “strategic. It’s a good fit culturally, and it’s a good fit because we have different investing styles,” she says.

Morningstar’s Ms. Hickey says moving the fund will likely bolster sales and reduce the expense ratio. The fund’s current ratio of 1.95% compares with a 1.43% average for mid-cap value funds.

Questions, observations, stock tips? E-mail Jeff Benjamin at [email protected].