A Comeback for `Turnaround' Funds? --- Analysts Believe Recovery Is Near
NEW YORK -- Bull market? What bull market?</br></br>That is what investors in many of the "turnaround" mutual funds must be wondering. Although these funds don't always invest in companies mired in bankruptcy court, they make their money the same way the classic vulture funds do -- by dabbling in beaten-up securities that most other investors have left for dead.</br></br>The funds have performed miserably for some time. They trailed the market badly in 1989 and 1990. And with a few notable exceptions, 1991 has so far been another woeful year.</br></br>But with many investors now betting on the end of the recession, fund managers and fund analysts reckon better times may lie ahead for turnaround mutual funds.</br></br>"Nobody has focused on this area for the last year and half, with good reason," says Robert Martorelli, manager of the Merrill Lynch Phoenix Fund. "You don't want to own leveraged companies, and financially and operationally troubled companies, in a recession. But if you believe we've seen the worst {of the recession}, as I believe we have, then there's good reason to be optimistic."