NEW YORK (CNNfn) - In a world dominated by Janus, Fidelity and Vanguard, the Al Frank Fund is not exactly a household name.
But to Al Frank, the investment adviser who founded the fund, the name carries some bragging rights: The fund earned 60 percent last year and is walloping 97 percent of its peers in 2000.
"My wife wanted to call it TAFFY - The Al Frank Fund Yes," Frank said this week. "We left off the 'Yes.' "
 The two-year-old fund, tiny with just $12 million in assets, is an offshoot of Frank's investment newsletter, Prudent Speculator. The newsletter is ranked fifth in performance over 15 years at Hulbert Financial Digest, which ranks newsletters. Over eight years, Prudent Speculator ranks second in performance, according to Hulbert.
The fund, which invests in small-cap value stocks, benefited in part from a well-timed bet in 1998 in battered semiconductor stocks. Its top holding, Siliconix (SILI: Research, Estimates), has increased in value by 1,000 percent since then.
Frank, 69, who has also been a college professor and a printer, co-manages the fund and edits the newsletter from his mountain-top home overlooking Santa Fe, N.M.
Co-manager John Buckingham oversees day-to-day operations. Al Frank Asset Management also manages $100 million in private and small business accounts. Frank has been publishing the newsletter for 23 years.
The fund's strategy is to buy stocks that are trading at 50 percent or less than what Buckingham and Frank think they are worth.
"When the fund began, there were dozens of technology stocks on our recommended list because of the so-called 'Asia Contagion,'" Buckingham said.
About half the portfolio are technology names, such as Kulicke & Soffa Industries (KLIC: Research, Estimates), a semiconductor capital equipment company. The other half are traditional value names such as Maverick Tube (MAVK: Research, Estimates), an oil services company that Buckingham started buying at $10 a share. Maverick is trading at $26 these days.
"You ride out the downturn and you're usually rewarded in the end," Buckingham said.
 Other stocks include homebuilder D.R. Horton (DHI: Research, Estimates), which has lost half its value but has record earnings every quarter; Trinity Industries (TRN: Research, Estimates), a diversified manufacturer, and battered toy maker Mattel (MAT: Research, Estimates),
Buckingham also likes airline stocks like Delta Air Lines (DAL: Research, Estimates), which owns a big stake in online auctioneer Priceline.com (PCLN: Research, Estimates).
"It's a way to play the Internet sector," Buckingham said.
Scott Cooley, a fund analyst at Morningstar, said he's impressed by Frank's high rating in Hulbert Financial Digest. The fund also made a smart move by investing in semiconductors when many on Wall Street wouldn't touch them.
"Hulbert is blunt and tough on newsletters," Cooley said.
Still, Cooley said investors might be better off with a bigger fund family. He pointed out that the smaller fund groups have higher expenses. The Al Frank Fund expense ratio is 2.2 percent, which is high, Cooley said.
"There are a lot of smaller shops that roll out funds. Maybe it's done well, but a lot of funds at smaller shops have flamed out," Cooley said. "But it looks like he made some good choices. It's a tough business. If you're an unknown shop and you can stick around, you must be doing something right."
Frank, who bought his first stock at age 38 in 1968, said he became a devoted value investor after reading the bible of all value investors, Benjamin Graham's "The Intelligent Investor."
"The idea of value stocks appealed to me," Frank said. "Even though I'm a multi-millionaire, I still go to discount gas stations to save 6 cents a gallon."
The recommended portfolio in the Prudent Spectator has earned an annualized 24 percent a year for the past 23 years, Frank said.
"It's my third career, and unless I become a novelist I'll be doing this until they carry me out," Frank said. 
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