May 15, 2002 — Internet-oriented funds fell 18.8% in April, a difficult month for technology companies overall following poor earnings and concerns over corporate fraud. Stocks of higher-beta Internet companies were most susceptible to negative news during the month.
The broader market and the Nasdaq outpaced most Internet funds in April. The S&P 500 fell 5.8%, and the Nasdaq slid 8.5%. Internet-focused funds tracked by Standard & Poor’s were down 19% on average as of the end of April. The Nasdaq lost 13.5% for the same period.
A few Internet funds bucked the trend for the month. Kinetics Internet Emerging Growth Fund (WWWEX), rose 10.7%, and Baron iOpportunity Fund (BIOPX) rose 6.0%. Both Internet-oriented funds take a broad approach to the sector, avoiding companies with financing risk and paying close attention to valuation.
Kinetics New Paradigm Fund (WWNPX), which rose 10.4% in April, is essentially a large-cap growth offering that holds few Internet stocks. Instead, the fund seeks to capture the growth of the Internet by investing in companies whose business models lend themselves to the medium.