Fund Zeroes In On Tech, Resources

The $1.6 billion fund seeks high-quality growth stocks that can sustain their rates of expansion. And that's reflected in the fund's top 10 holdings.

As of Oct. 31, Suntech Power Holdings (NYSE: - ) took up the smallest share among the top 10, at 1.4% of assets. The largest was Google (NasdaqGS: - ), at 2.7%.

Google has been a top holding for several months. The fund boosted its stake to 78,200 shares from 62,500.

The stock has been a consistent winner, moving to 630 from 460 in 2007. That includes a 13% drop from an early November high of 741, which coincided with the general market downturn.

Quarterly earnings growth slowed to 43% in Q1 but has since re-accelerated. It hasn't dropped below that since 2004.

Suntech, a solar panel maker, is a new position, taken since Aug. 31. It has jumped from 34 to as high as 75, but it's sold off in recent weeks to about 61.

Another top holding in the fund, SunPower (NasdaqGM: - ), also makes solar power gear. The fund picked up 310,000 shares during the third quarter. That stock went public in November of last year at 18 and hit 149 on Nov. 8, 2007, before pulling back to 106.

Michael Carmen and Mario Abularach, who run the fund as subadvisers from Wellington Management, have shown interest in more traditional energy firms, too. The fund boosted its stake in Chesapeake Energy (NYSE: - ) to 780,000 shares from 586,000.

Less Powerful

Chesapeake hasn't had as steep a run-up as Suntech, Google or SunPower, and its earnings have slipped in the past three quarters. But its sales have risen the past six months, and the stock is trading at about 38, up 31% for the year.

It's 7% off its high and testing its 50-day moving average line, a level at which many investors watch for signs of support for a stock.Another stock on the resources front is Rio Tinto (NYSE: - ). London-based Rio Tinto is a major iron miner in Australia, Canada and Brazil, as well as a producer of industrial minerals such as borates.

The fund boosted its holdings to 84,700 shares from 78,500, lifting the stock to 1.6% of assets.

Commodity prices have been consistently high over the last year, as demand from China and India has risen. Rio Tinto's operations in Brazil in particular have benefited from Asian demand.

Rio Tinto started the year at 212. It stood at 357 on Nov. 7 before gapping up to a new high of 478 on news of a buyout bid from BHP Billiton. It's now 13% off its high.

Earnings slipped in its latest six-month period, following consistent 30%-plus growth in prior periods. But analysts polled by Thomson Financial see second-half EPS up 135%.

Focus Media (NasdaqGM: - ), another top holding, is a Chinese outdoor advertiser. It has nearly doubled in value over the course of the year. The company has been expanding the kinds of advertising it does to different media, including mobile phones. Growth Opportunities added to its position in the stock in its latest reporting period.

Red Hat (NYSE: - ), a software developer, was one of the biggest sells in the fund. The position was taken down to 66,315 shares from 657,100 shares over the course of several months.

Red Hat was a fixture in the fund for a year, with the stake topping out in the second quarter.

Slowing Growth

Though quarterly earnings growth has been strong, it's slowed from the triple-digit pace of last year.

The stock is 25% off its 52-week high; it's looking for a new bottom below its 50-day and 200-day moving averages.

It has an IBD Accumulation/Distribution Rating of D.