Investment broker launches business index, includes top 40 companies

Long Island Business News, Jun 17, 2005 by David Reich-Hale

There are always attempts made to promote the economic base of the local community, White said. This is an interesting idea.

But it has been done before, said Geoff Bobroff, president of Bobroff Consulting of East Greenwich, R.I.

There are a handful of funds like this, Bobroff said. There's one in Texas somewhere and another one in the Michigan-Ohio area. Also, some fund companies, like Franklin, have funds dedicated to states.

There are also socially-responsible funds, Bobroff said. Funds exist for religious investors who might swear off tobacco or alcohol. Other funds for environmentally friendly investors are available.

San Mateo, Calif.-based Franklin Templeton Investments has a list of mutual funds that are dedicated to municipal bonds issued in various states, including New York, said Matt Walsh, a spokesman for the company.

We have these funds for most states, he added.

But funds dedicated to the stock of corporations in a specific region are rare.

The problem with them is if one or more of the companies in the fund falls out of favor, what do you do? Bobroff said. If there isn't another company worth investing in, you're stuck.

But Mazoyer said that if a company in the portfolio collapses, the strategy limits the exposure.

That's why we limited allocation of any one company to 5 percent, Mazoyer said. If we did this based on size and kept it uncapped, Computer Associates would be 18 percent of the portfolio. The way we've done this, no one company can dominate.

Mazoyer added that our count shows that there are 173 publicly traded companies on Long Island. If one of the top 40 companies fall out of favor, we can remove it, and in time, replace it. There are a lot of other companies to choose from.