New Method Serves Merrill Lynch Fund Well Global SmallCap paces peers the past two years; Chiang favors U.S.(B)

By Joanne Legomsky

Investor's Business Daily

When Ken Chiang took the helm of the Merrill Lynch Global SmallCap Fund in April 1998, it signaled a major change in the fund's strategy.

The fund no longer would be run by a group of managers, most of whom also were responsible for running other funds. The fund would add its own team of dedicated analysts. And finally, the fund would shift from a top-down, country-based asset allocation approach to a bottom-up stock selection process.

Chiang, part of the management team since 1994, said the last point was key in differentiating the fund from other global funds. Such funds invest both in the U.S. and abroad.

"We wanted to avoid country myopia," he said.

So today, each analyst is charged simply with identifying the best firms in the industries he follows, regardless of where the companies are headquartered.The process usually begins with internal screens.