Nations Value Returning To Its Roots New Manager At Helm She swerved away from high P-E stocks and sees fund poised for rebound.(MUTUAL FUNDS)(MUTUAL FUND PROFILE)

Byline: DAN MOREAU

A year ago, Lori Ensinger was brought in to return Nations Value Fund to its value-oriented roots.

She aggressively shifted out of higher P-E stocks such as Washington Mutual, which had been pummeled in a bear market that left the fund down 7.5% in 2001. That was some 3 percentage points below the average of its large cap value fund peers.

In their place, she bought Honeywell and UST, low P-E stocks she believed had been unfairly punished by analysts. United Technologies, which she inherited from previous managers, did a round trip out and then back into the portfolio when it once again looked like a bargain.

Today, Ensinger says, the fund, with $600 million in assets and a D- Rating from IBD, is poised to capitalize on a market rebound. Just don't ask her when that rebound might start. The fund was down about 15% for the year going into Wednesday, though it was off as much as 21% before the latest rally. Its large-value peers tracked by Morningstar Inc. were down 16%.

"I'm not one to call the bottom," she said. "But I can tell you how to structure a portfolio in this environment."

For Ensinger, who directs all of the value investing strategies for parent Banc of America Capital Management, this is a bipolar market. On the one hand, investors have had it. Pessimism and emotionalism rule.