Kopp Emerging Comes Roaring Back Up 61% So Far In 2003 After it dived 35% in '01 and 52% in '02, fund's fast growers catch hold.(A)

Byline: KEN HOOVER

The managers of Kopp Emerging Growth Fund were forced to take a hard look at their holdings as the stock market slumped to its bear-market low last October.

Though discouraged that their small-cap growth stocks were getting hammered, they decided in most cases to stick with their picks. They thought a market recovery was imminent.

"They were hit far worse than they should have been," said co-manager Sally Anderson of the fund's holdings. "If you looked at price-to-book or price-to-sales ratios, they were incredibly cheap. It was an incredibly tough time. Investors were running away from growth and risk."

The fund's 25,000 shareholders saw much of their stake dissolve. It was down 35.3% in 2001 and 51.7% in 2002. But few deserted, the managers say.

They've been rewarded for their patience. The fund was up 60.63% this year going into Friday and 127% from the fund's Oct. 9, 2002, low through Friday, Aug. 22.

Make no mistake. Kopp Emerging Growth is a volatile fund. The managers believe that in a downturn it will underperform the Nasdaq Composite by a factor of 1.17. In upturns, it will outperform by a factor of 1.56. Since the October low, it's been outperforming by nearly 200%.