Reynolds Fund Comes Roaring Back; Up 122% So Far In '03; Manager directs focus to companies serving people's main concerns.(MUTUAL FUNDS)(MUTUAL FUND PROFILE)

Byline: KEN HOOVER

The $43 million Reynolds Fund is cruising near the top of the heap in this bull market, up a whooping 122% this year going into Monday.

It's no small feat for a fund that holds 250 names, none taking up more than 1.5% of fund assets, to beat the market by so much. The S&P 500 is up 20.66%, and the fund's large growth peers tracked by Morningstar Inc. are up 24.04%

"There are 75 industries out there to pick from," said Fritz Reynolds, the founder and manager of the fund. "Then there are seven or eight industries with great fundamentals. That's where we have our holdings."

Reynolds looks at it this way: Various studies have shown there are about five things people really care about. First come family, friends and loved ones. There are not many investment opportunities there, he says. Next comes good health.

"The cost of medicine keeps going up, but people are somehow going to find a way to get that prescription filled," said Reynolds. So biotechnology makes a good bet for Reynolds' fund. Amgen, Genentech and Human Genome Sciences are among his holdings in that category.

Consumers like discounts, so the fund holds discount retailers like Costco and Staples. People spend to enjoy their leisure time. Reynolds says he bought a digital camera some time ago. So he invested in Lexar Media, which makes flash memory cards and flash storage for photography.