Nov. 6, 2002 — Firsthand Funds is planning to merge its $23-million Firsthand Communications Fund (TCFQX) into its $409-million Firsthand Technology Value Fund (TVFQX).
“The main reason we want to merge the Communications fund is the poor outlook for the telecommunications sector,” said Phil Mosakowski, director of marketing at Firsthand Capital Management.
In a proxy statement filed by Firsthand on October 18, the company wrote: “The devastation in the communications industry in recent years has resulted in fewer quality companies, thereby making it harder for [Communications Fund] to maintain a diversified portfolio of companies in this industry.” Firsthand added that shareholders in the Communications fund would have broader exposure to technology companies as a result of the merger, believing that the communications industry may be one of the last sectors to participate in a recovery.
Both portfolios have suffered badly. Year to date through November 5, the Communications fund plunged 58.3%, while the Technology Value fund dropped 55.3%. In calendar 2001, the Communications fund lost 60.7%, and the Technology Value fund lost 44%.