October 11, 2006

Betting On the Bank

Gamign And Casino Fund

As we were trolling the stories on the Casino City Times, we came across a mention of a mutual fund called the Gaming and Casino Fund. Apparantly its a fund that invests in only gaming and casino related stocks. To our knowledge, it is the first fund to solely invest in gaming and casino related companies. We were fascinated by the concept, and we dug deeper to find out more.

We're no financial experts, one look at the name of the site should tell you as much, but we are interested in all things Casino, and when we heard about this fund, we had to get some more details.

They list their investment strategy in this way:

The Fund will normally invest at least 80% of its total assets in equity securities issued by gaming and casino companies, both domestic and foreign, regardless of their stock market value (or "market capitalization"). Equity securities include common stocks, preferred stocks, securities convertible into common stocks and warrants. The Fund may invest up to 25% of its total assets in foreign companies. The Fund will usually own between 40-50 equity securities at a time in fairly equally weighted amounts of small, medium, and large cap blend/core stocks and small, medium and large cap growth stocks. It may secondarily own small, medium, and large cap value stocks. The primary universe of equity securities will consist of casinos including hotel, resort and cruise ship casinos; gaming manufacturers; pari-mutuel companies; lottery support systems; and electronic/video game developers, manufacturers, and distributors.

In buying and selling securities for the Fund, the Advisor uses a research oriented "bottom-up" investment approach to create the Fund's investment portfolio, focusing on company fundamentals and growth prospects when selecting securities. In general, the Fund emphasizes companies that the Advisor believes are strongly managed and will generate above-average long-term capital appreciation. Technical analysis, recent price patterns and economic factors are also considered, especially in trading decisions of securities already fundamentally selected for purchase or liquidation. In general, the Advisor seeks firms that can grow their businesses regardless of the economic environment.

Their latest prospectus lists holdings in such gaming companies as Penn National Gaming Inc, Harrah’s Entertainment Inc, Las Vegas Sands Corp, Scientific Games, Station Casinos Inc, and Pinnacle Entertainment Inc. So it appears they are holding to their strategy.

But how have they done with their investments? Well, a quick look at the Market Watch site shows us. The fund is still very young, not even completing its first whole year. As of the writing of this article, if you had invested 10k into the fund at its launch at the end of March, you would find you had just about broke even through the last few months. There has been fluxuation that would have brouht you as high as 10.5k, and as low as 9.5k, though again, this is still a very young fund.

Time will tell wether this fund is a winner or not, and we'll have to keep an eye on it, but one would have to imagine that betting on betting isn't a terrible idea.

The Fund's Official Site

Market Watch's Summary of the Fund

Yahoo Finance Summary

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Posted by Russell Miner at October 11, 2006 3:58 PM
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