Direct link to the 'New Economy'

They are the emerging titans: companies forging a high-tech "New Economy" of blazing, relentless growth and, potentially, enriching us as did those that harnessed the steam engine and electricity.

Such Wall Street Wunderkind have been scattered for years across the investment horizon, awesome from a distance, not always easily recognizable.

The Wired Index Fund (800-915-6564) seeks to harness the energy of the the so-called New Economy by investing in 40 companies that Wired magazine calls the vanguard of a brave new information economy.

The companies are geared for an economy that differs radically from the fading century's industrial version: People work with their ideas more than hands; innovation counts more than mass production; and high-tech and a laissez-faire ethos have broken down barriers to a global market.

"As the industrial economy was about creating and distributing goods, the information economy is about the creation of ideas and information," says Jim Atkinson, director of US operations for Guinness Flight Investment Management, which runs the fund.

Indeed, since its Dec. 15, 1998 inception, the fund has flaunted a return of 25.2 percent through Feb 22, easily beating the 10 percent climb by the Standard & Poor's 500 Index during that period.

But some mutual-fund analysts caution against a fund that rides two fads: indexing and New Economy theorizing.

"It's a misnomer to call it an index fund," says Sheldon Jacobs, editor of the No-Load Fund Investor newsletter in Irvington-on-Hudson, N.Y.

Index funds focus on a clear class of assets - in biotechnology or automotive stocks, for instance - and offer low expenses. The Wired Fund, with an expense ratio of 1.35 percent, falls short of both criteria, says Mr. Jacobs.

"Instead, I describe it as an actively managed fund with zero portfolio turnover," he adds.

Moreover, the criteria for Wired Fund's New Economy companies could have identified leading firms of any era.

These include "intelligent use of technology," "globalism," "innovation," and "strategic vision." During any epoch, firms in competitive industries lacking such attributes are liable to fail.

Finally, the creators of the index did not select the companies as investments but rather as cutting-edge firms for the dawning information age, says John Browning, one of the index's two founders. Consequently, investors should be wary of the heavy price-to-earnings ratio of 31.

Still, the Wired Fund rests on a provocative concept and features turbo-charged companies.

Although it includes many high-tech leaders - including the dynamic duo of the Internet (America Online and Yahoo!) - it is not a cyberspace fund. It's unique in its sector diversity: banking (State Street); insurance (AIG); oil services (Schlumberger); transport (Fedex); specialty steel (Nucor); hotel management (Marriott International); and autos (DaimlerChrysler).

The companies exemplify how "value is shifting from making things to making and defining choices," says Mr. Browning.

For example, he notes how in its early days Ford Motor Co. had to handle most facets of production itself, from raw materials, to transport, to final assembly.

Now, it gathers most of its parts for autos from suppliers. And it is engaged far more in managing business relationships, research and development, and addressing highly varied consumer tastes.