Sticking To Their Guns

Last year, for example, Clipper and UAM Clipper Focus rose 37% and 44.3%, respectively. In the last quarter of 1998, a bearish period, the firm's institutional accounts that correspond to the investment strategies of Clipper and UAM Clipper Focus fell 1.4% and 4.7%, respectively-both well below the S&P 500 Index's 10% drop.

Sandler says financial advisors don't necessarily gravitate to one or the other. "You'd think they'd prefer Focus because it fits more neatly into asset-allocation models, but that isn't always the case," he says. "I think there's a class of advisors who like funds with a fully invested posture. But there is also a large group that prefers Clipper's lower risk profile and lower turnover." Some may prefer Clipper's lower expense ratio of 1.09%, compared with 1.4% for UAM Clipper Focus. Sandler says the latter fund's expense ratio is higher because it is available through no-transaction-fee is available through no-transaction-fee programs at discount brokerage firms.

Sandler thinks that the market will continue in a downward pattern over the next couple of years and is positioning the fund defensively by beefing up positions in companies he considers best prepared to weather an economic and market slowdown. In the real estate investment trust sector, his largest holding, Equity Residential Properties Trust, focuses on apartments because "people always have to live somewhere." The fund also added to its position in McDonald's Corp. a few months ago. Even though the burgermeister's stock has fallen nearly 15% since the beginning of the year, Sandler is, characteristically, keeping the faith. "The weak Euro hurt earnings last year, and monthly restaurant sales have been lumpy," he says. "But over the long-term, it's the company's great franchise that really counts."