(MONEY Magazine) – GOLDMAN COOKS UP A NET FUND

Another sign the market's gone wiggy: Goldman Sachs, one of the most elite players on Wall Street, will offer an Internet fund this month.

It's somewhat surprising since more mainstream asset managers--notably Fidelity Investments--are still denouncing the Internet feeding frenzy. "I find it interesting that Goldman is willing to go where Fidelity is not," says John Rekenthaler, research director at fund analysts Morningstar.

But what's with the name: Internet Tollkeeper? Aha--the escape hatch. Goldman's Net fund will buy only what are called infrastructure picks, presumably names like Cisco or Lucent, considered the gatekeepers to the info superhighway. No full-fledged e-commerce plays here. No high-flying IPOs either.

You can understand Goldman's desire to hug the line between relative safety and outsize gains--until you recall that Goldman Sachs is also the leading underwriter of such full-fledged e-commerce plays and high-flying IPOs as eToys, StarMedia and iVillage.

In all, Goldman's investment bankers have helped companies raise $6.5 billion through IPOs over the past year, many of them the kind of dotcoms its new fund plans to skirt. Is this a case of Goldman refusing to eat its own cooking? The company did not answer our requests for comment. Still, some think its strategy could help investors who want to play the Net. "It's difficult to imagine the IPO market could continue to produce the results we have seen," says Stephen Lacey of the IPO Reporter. Rekenthaler, however, notes that infrastructure shares aren't for widows and orphans: "Those are still expensive stocks. Maybe they're one small step closer to safety, but they're still very volatile." --LISA REILLY CULLEN

PREMIER PERFORMER BOLTS TRANSAMERICA

Philip Treick, the Dell-lovin', Amazon-surfin' stock picker who led Transamerica Premier Aggressive Growth and Transamerica Premier Small Company to 80%-plus gains in 1998, has left to start a new asset management shop, dubbed Aesop Capital Partners. 'Twas Aesop, you'll recall, who said it's better to starve free than to be a fat slave. "I wanted more operational independence," Treick says, "and I want to control how we are marketed." Much of his two former funds'

$438 million in assets came through fund supermarkets like Schwab's One Source. That made it too easy, he complains, for some investors to hop in and out. If Aesop launches a mutual fund, Treick says, "I'd probably avoid" the supermarkets.

Treick, 35, is the third star manager to leave the burgeoning Transam shop, after Jeff Poppenhagen (now at Pioneer Funds; see below) and Glen Bickerstaff (now at TCW Galileo). Treick's old portfolios will be led by his former co-manager, Chris Bonavico, 34. Although Bonavico was the junior partner at the funds, he says he's responsible for such power picks as Cisco Systems, up 38% this year, and Level One, which recently was acquired by Intel at 63% above its January price. --PAT REGNIER

FUND FEE FOLLIES

Pioneer Growth, one of the few top-rated portfolios in Pioneer's stable, wants more money--and then some. The firm has asked shareholders to approve a hike in the fund's basic expense ratio from 0.95% on class-A shares to 1.15%. Pioneer justifies the increase by citing the growth fund's strong performance (33.5% annually the past three years--or 4.4 percentage points better than Standard & Poor's 500-stock index) and says the higher charge is still a bargain compared with others. But if manager Jeff Poppenhagen keeps up the good work, shareholders would have to pay even more, since Pioneer also wants a performance bonus of as much as 0.1% for outshining the Russell 1000 index. Should Pioneer Growth lag, its fee would be "reduced" to 1.05%.

For a more shareholder-friendly version of performance fees, check out the Metropolitan West AlphaTrak 500 enhanced index fund, which seeks to beat the S&P 500 by one percentage point or more a year through a complex strategy involving futures contracts and short-term bonds. The fund's expense ratio maxes out at 0.9%, but if the fund fails to beat the index, investors pay just 0.2%, about what most traditional index funds charge. In its first year, the fund has topped the index by three percentage points. --P.R.

JANUS SWIMMING IN AMAZON

Some folks love Amazon.com. Then there's Janus, whose interest in the online retailer may be bordering on obsession. The 13 Janus funds together own 10.1% of Amazon.com's stock, according to a Securities and Exchange Commission filing. Among the funds that recently have been most enamored of Amazon.com: Janus Mercury, Worldwide and Enterprise.

Amazon.com, which hasn't earned a profit in its 14-quarter history, trades at $113 and has a market value of $18.3 billion. The stock is up 5.9% this year, after soaring 980% in 1998.

Should Janus diversify? "Obviously," says a spokeswoman, "the ownership stake shows that Janus' managers and analysts feel very strongly about the stock." --BRIAN P. MURPHY