Sunday, July 30, 2006

A Stock Fund For Nascar Fans

Sunday, July 30, 2006, Investing, The New York Times
Follow Your Bliss, Yes, but Maybe Not Into a Stock Fund
By J. ALEX TARQUINIO (link to full article: HERE)

"IF you want a broad stock portfolio in a single mutual fund, you might buy a plain-vanilla Standard & Poor’s 500 index fund. But if you’d like something quirkier, with more horsepower and much more torque, you might prefer the StockCar Stocks Index fund. It is the perfect portfolio for Nascar race fans, said Robert T. Carter, the fund’s manager. “That would be the logical target market,” he said. “Many Nascar fans have significant assets. This may be a complement to their existing asset management philosophy."

Its core holdings include the two publicly traded car race track owners, Speedway Motorsports, which is based in Concord, N.C., and International Speedway, based in Daytona Beach, Fla. But two stocks wouldn’t be enough to constitute an entire mutual fund, not even an eccentric one.
So Mr. Carter rounds out the portfolio with official Nascar sponsors and suppliers. General Electric — the conglomerate based in Fairfield, Conn. — qualifies because it owns NBC, which broadcasts Nascar races. Home Depot, the home improvement chain based in Atlanta, and Kellogg, the cereal maker based in Battle Creek, Mich., are in the fund because they are Nascar sponsors.

No one can say precisely how many more cornflakes are served in American kitchens each morning because there’s a picture of a race car on the box. But the Nascar connection constitutes the entire strategy of this mutual fund. Mr. Carter said he did not evaluate the stocks but acted like the passive manager of an index fund, strictly eliminating companies that end their race-car sponsorships and adding companies that take them on.

Roy Weitz, the publisher of FundAlarm.com, said he was not surprised that it had outperformed the S.& P. index over long stretches. “The idea that these stocks should be arranged in a portfolio because they support Nascar is sort of an absurd concept, but it appears to be working,” he said.

Nascar fans have certainly been loyal — both to their sport and to their fund, which Mr. Carter has managed since its inception in 1998."

7/30/2006 11:00:00 PM

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