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Small-Cap Growth Led The Pack In July; Up 5.72% In The Month; Some fund managers see more to come; others fret economy may slow.(MUTUAL FUNDS)(INVESTMENT TRENDS)

Investor's Business Daily

| August 01, 2003 | COPYRIGHT 2003 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: PAUL KATZEFF

Small-cap growth funds led U.S. diversified fund categories in July, climbing 5.72% in the month. They paced U.S. diversified funds' 2.52% gain, according to Lipper Inc.

The performance reflected a solid month for the market. The Nasdaq composite jumped 6.05% through July 30. The Dow Jones industrials gained 2.52%.

Bond funds fell as interest rates backed up and fiscal issues hit municipal debt.

"Stocks avoided a collapse because the economy is starting to come on like gangbusters," said Philip Orlando, lead manager of $275 million Federated Large Cap Growth Fund. "And we're seeing increased earnings estimates for the third and fourth quarters."

Small-cap growth funds shined. "They were better (than other categories) in terms of beating expectations and year-over-year growth," said Paul Wojcik, lead manager of $65 million T. Rowe Price Diversified Small-Cap Growth Fund.

Frontier Airlines, one of his top performers, gained 29% for the month through July 30.

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