Guinness Flight Investment Management of Pasadena, Calif. and Wired magazine have a challenger as to who can claim having the right definition of the "new economy."

Donald L. Luskin and H. Davis Nadig, two former executives with Barclays Global Mutual Funds of San Franciso who write highly-opinionated pieces on their personal finance website,, have registered to start a new family of funds, including one to be called the "New Economy Fund." Guinness Flight markets its Wired Index Fund, opened late last year, as representative of the new economy.

Luskin and Nadig are getting back into the mutual fund business, having left Barclays a year ago. On May 21, the pair filed with the SEC to create the new fund family, the Funds, that will be sold and serviced over the Web and, in the words of the funds' creators, "define the new economy." The two will also manage the funds themselves. Luskin, the former chief executive at Barclays, lives in Silicon Valley and Nadig, the former managing director and chief strategy officer at Barclays and a founding partner of Cerulli Associates of Boston, works from Boston.

According to the SEC filing, companies of the "new economy" are those which "through innovative use of technology or the imaginative use of organizational techniques or marketing methods... are redefining the way goods are delivered and services are provided in the economy."

One of the four funds outlined in the SEC filing is the New Economy Fund, an actively-managed fund that will be made up of not only Internet companies but also stocks from other sectors including media, electronics, healthcare, financial services and communication - areas expects will drive the economy in the future as the world evolves out of the industrial age. Guinness Flight's fund purports to operate on similar principles. The fund, the Wired Index Fund, is based on a stock index established in June 1998 by Wired magazine, the popular Internet-age publication. Guinness Flight has licensed the Wired Index name from Wired magazine, as other companies license the Dow Jones name for their Dow Jones index funds.

Both the magazine and Guinness Flight promote the index and the index fund as representative of the "new economy."

The Guinness Flight fund has done well, returning 34 percent since its inception on Dec. 15, and 20 percent in the first quarter of 1999. The fund has had net inflows of $92 million since it opened to investors last winter.

Just three days before MetaMarkets Advisors of Menlo Park, Calif. filed with the SEC for its own new economy fund, Nadig of, wrote a blistering attack on his website, about Wired magazine and a cover story the magazine is running this month about the index.

The article and the filing take a step beyond the creation of the Wired Index Fund from the Wired magazine index in the intermingling of editorial content and product.

Guinness Flight has presumably benefited from the use of the Wired name which it bought and the coverage the Wired Index receives in the pages of Wired in print and on its website. The article that Nadig attacked was published in Wired's June issue, which was released in May. Wired devoted 13 pages to the index for the index's one-year anniversary. In that year, the index gained 81 percent.

"Look at this month's issue of Wired," Nadig wrote on his site May 19 in an article entitled, The Fall of Wired.' "They had a great opportunity to update the Wired Index, or at least explain persuasively why it was still the most relevant collection of companies in the New Economy. They squandered it entirely." The article also suggested that another magazine, Business 2.0 does a better job of reporting about the "new economy."

The sub-headline read: "Dave looks at how a disruptive newcomer (Business 2.0) has quietly stolen the talking stick from the original New Economy zine."

Contacted both by phone and by e-mail, Nadig declined to comment on the New Economy Fund, citing the SEC quiet period. Until a fund is approved, it is not supposed to conduct any marketing. It customarily takes about 90 days for a fund to be approved.

Nadig did however comment, by e-mail, about his article.

"As for Wired itself, I think you just have to take it as it was meant - a media commentary," Nadig wrote. "A discussion about the index and funds that track it will just have to wait a while."

Michael Noer, business editor for Wired, defended Wired's own coverage of the Wired Index, saying that The Conde Nast Publications, publisher of Wired, has no stake in the Wired Index Fund. The Wired Index name is simply licensed to Guinness Flight, he said.

"The Wired Index is an editorial product. We don't run a fund ourselves," Noer said. Noer declined to comment on Nadig's specific attacks on Wired. But, he said he felt that was criticizing its prospective competition and effectively promoting its own funds through the article.

"That seems to be an obvious conflict of interest," Noer said.

James Atkinson, Jr., director of the U.S. office of Investec Guinness Flight, said he disagreed with Nadig about the quality of the Wired coverage.

"I find it rather amusing, and we're flattered we're a target, if in fact we are," he said, when asked if he thought the Wired Index Fund was the real target of Nadig's article.

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