July 3, 2002 — Here is a screen of the best- and worst-performing technology funds so far this year.
Investor sentiment in the second quarter went from bad to worse as new allegations of accounting fraud and fallout from WorldCom (WCOM) helped push the Nasdaq near its lows following the terrorist attacks last September. Higher-beta tech funds plunged 34.3% on average as of mid-year as stock prices continued to weaken. Most of the losses occurred in the second quarter.
Some of the best relative performers in this environment included, Matthews Asian Technology Fund (MATFX), which fell 7.2%, Franklin Custodian Fds:DynaTech Series/A (FKDNX), down 12.4%, and Kinetics Internet Emerging Growth Fund (WWWEX), down 17.7%. Kinetics Internet Fund (WWWFX) also made the list of the five “best” relative performing tech funds, losing 17.8%. Losses among tech funds remain severe. The worst performers are down over 50% so far this year, already having suffered steep losses in 2000 and 2001.
Matthews Asian Technology, a $15-million specialty fund that focuses on tech investing in the Asian region, was shielded, in part, by stronger domestic demand for tech products in Asia versus the U.S. The absence of U.S. tech shares in the fund has been a distinct benefit as corporate investment in both tech and telcom in this country have slowed dramatically from 1999 and early 2000 levels. The portfolio, which invests exclusively across Asia, including Japan and China, was in positive territory in the first quarter, partly aided by the anticipation of a recovery in the U.S.