Tech Funds Continued Descent in September

October 12, 2001 ( - Against a backdrop of earnings warnings and overcapacity in the sector coupled with the terrorist attacks in September, Internet-focused funds plummeted by 19.0% on average over the month, according to Standard & Poor's, compared with a fall of 17.0% for the Nasdaq.

Year-to-date, investments in the sector are down 46.5% as investor confidence has eroded. And if a lone success story were excluded, the average annual decline would have been 51.1%.

Internet funds that held up the best over the month had high cash positions and low exposures to popular, widely held Nasdaq stocks.

This month’s better performing funds, in terms of returns in US dollars with dividends reinvested, include:

  • Potomac Internet/Short Fund, the best-performing fund among those that short Internet stocks – rose by 25.2%
  • Kinetics Internet Emerging Growth Fund, the best-performing among those that take long positions – fell by 5.6% over the month, but is up 0.3% over the quarter
  • iMillennium Fund, which invests in defensive stocks, fell by 11% in September.
  • Analysts Aggressive, holding 33% in cash, fell by 9.1%.