David Klassen has some pretty big shoes to fill at Chase Manhattan Corp. and so far he seems to be doing just fine. In March, Mr. Klassen, 37, succeeded Mark Tincher as director of equity investment at Chase's asset management unit. With the promotion, he also became manager of one of the most successful bank-managed mutual funds ever the Vista Growth and Income Fund.
Since its launch in 1987, the Growth and Income Fund has consistently ranked near the top of its category. In 1992, for instance, it had the best track record of any growth and income fund bank-managed or not. And it's still going strong. The fund's average annual return for the five years ended Sept. 30 was an impressive 20.65%, outpacing the growth-and- income group average of 15.91%.
While the fund's one-year return of 21.28% is slightly below the 23.08% average for the category, Mr. Klassen seems unfazed. He says he doesn't expect to top the charts all the time.
Being No. 1 connotes taking a lot of risk, which isn't necessarily consistent with the needs and desires of shareholders, he said in an interview. What you don't want to do is have a bad year that discredits your reputation. The Growth and Income Fund's reputation has certainly given it a lift. When Mr. Klassen joined Chase as a co-manager of the fund in 1992, the portfolio had less than $200 million in assets. Since then, its coffers have swelled to $1.8 billion. The portfolio is the flagship of Chase's Vista Funds, a
$9.1 billion-asset fund family distributed by a unit of Bisys Group. Mr. Klassen, who now runs the Growth and Income Fund with co-manager Gregory Adams, is quick to point out that the fund has caught on both inside and outside the bank.
We sell 75% of our funds through independent financial planners, he said. The market is telling you we're not viewed as simply a bank-managed mutual fund. Though Mr. Klassen hasn't made any dramatic changes in investment style, he has put his imprint on the fund.
I firmly believe you place the portfolio where you have the most conviction, he explained. So I reduced the number of positions. We had 180 stocks; now it's 125, 130. Some of the fund's strongest gains in the last year have come in the technology sector. Our largest positions have been Sun Microsystems and Compaq, the computer manufacturers, Mr. Klassen said. Each holding represents about 1.5% of the portfolio.
However, he has been easing the fund's concentration in technology in the last year. Right now, it accounts for about 11% it was as high as 15%, he notes. The largest slice of the portfolio, about 15%, is in financial stocks now. Mr. Klassen's favorites include Citicorp, Bank of New York, Norwest Corp., and the Federal National Mortgage Association.
Mr. Klassen's role has expanded dramatically since his promotion in March. He now heads a 12-person staff that oversees $3.8 billion in equity investments.
Still, he squeezes in two nights a week to blow off steam in a basketball league, and he plays softball in the summers with a bunch of regular guys who couldn't care what I do for a living.
And he notes with some satisfaction that his wife of 11 years, Susan, works in a very different field from his: textile design. They have two boys, ages 3 and 1.