Stocks In Tocqueville Are Down But Not Out Small-cap portfolio, up 14% this year, focuses on price-sales ratios.(MAKING MONEY IN MUTUALS)(FUND PROFILE)

Byline: Joanne Legomsky

If there is an overriding theme at the Tocqueville Fund and Tocqueville Small Cap Value Fund, it is: First, do no harm.

The main goal at the New York-based funds is capital preservation, or makingsure that, at a minimum, investors' holdings don't decline in value after taking inflation into account.

The chief way Robert Kleinschmidt, manager of $65 million Tocqueville Fund, and Jean-Pierre Conreur, manager of $36 million Tocqueville Small Cap Value, cap their risk is by buying stocks that Wall Street already has decimated.

"We look for stocks that are totally washed out, where the market risk is completely deflated," Conreur, 63, said.

Kleinschmidt, 51, calls it contrarian value investing. "When investor sentiment is sufficiently negative, the stocks don't respond to bad news," he said. "We also have the luxury of taking a long-term perspective because these are practically captive funds."

Most of the holders are French investors who have their other funds with Tocqueville Asset Management, named for the 19th century French statesman and observer of American politics.