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Technology Stocks : Comverse Technology -- Ignore unavailable to you. Want to Upgrade?

To: Mark Ambrose who wrote (886)	10/1/1999 3:19:00 PM
From: Mark Ambrose	Read Replies (1) \| Respond to of 1331

CMVT recently bought by Monterey Murphy New World Technology mutual fund. fnews.yahoo.com ------------------------------------------------------------ Mutual Funds Oct 01, 1999 Top Funds? Tech of Course. Duh! By Craig Schneider & Steve Smith 10/1/99 The best performing funds over the last three months -- whether large-cap, micro-cap or anything in between, all have one thing in common: technology companies comprise a large percentage of their holdings. 'Technology will continue to be the leader for some time to come,' says Geoff Bobroff, who heads Bobroff Consulting, an independent mutual fund consulting firm. 'That is where the growth is and that is where investors' interest lies. The only question is, was the recent decline deep enough for growth to take a back seat to value? I don't think so.' If it works, don't fix it. Investors are sticking with large established tech behemoths and are also picking hot young companies. That sounds easy enough. The best performing fund for the quarter through September 29 was the $60 million Nicolas-Applegate Global Technology Fund (NASDAQ:NGTIX - news) , which returned 29.08% over the three-month period. It is also up 201% year-to-date. The fund's largest holdings include such blue chip tech issues as Microsoft (NASDAQ:MSFT - news) , Cisco Systems (NASDAQ:CSCO - news) and Yahoo! (NASDAQ:YHOO - news) . 'They are assuming that the U.S. economy will continue to do well and that technology will drive the economy,' says Russ Kinnel, an editor at Morningstar, the Chicago-based fund tracker. 'If that is true then large cap tech will do well.' Other tech heavy winners include the third best performer, the $137 million Van Wagoner Emerging Growth Fund (NASDAQ:VWEGX - news) , which returned 25.2% in the quarter. The fund has a 40% technology weighting, and has returned 143.34% year-to-date. The eighth-best performer is the miniscule Monterey Murphy New World Technology (NASDAQ:MNWTX) , which returned 23% in the period. Fund manager Michael Murphy only recently added such hot stocks as JDS Uniphase (NASDAQ:JDSU - news) and Comverse Technology (NASDAQ:CMVT - news) to the portfolio, bringing the tech weighting up to 38%. Health care and drugs represent 20% the holdings, which may explain why the year-to-date return of 39% trails the strictly technology funds. Need more proof that technology still rules? Firsthand Technology Innovators (NASDAQ:TIFQX - news) has 99.8% in tech stocks. At No. 20 on the list, it has a surprisingly concentrated 35% of its net assets in its top five holdings: GlobeSpan Inc. (NASDAQ:GSPN - news) , Concord Communications (NASDAQ:CCRD - news) , TranSwitch (NASDAQ:TXCC - news) , Novellus Systems (NASDAQ:NVLS - news) and Legato Systems (NASDAQ:LGTO - news) . What may be surprising to some is that micro-cap funds had a strong quarter. After approximately five to six years of lagging the market, they slowly crept back into favor before faltering recently. But, a quick look at those funds' holdings reveals a heavy concentration in - you guessed it - technology. 'It's not surprising,' says Burton Greenwald, a Philadelphia-based independent mutual fund industry consultant. 'At some point there has to be a rotation.' It's just an extension of investors' fascination with high-techs, Internets, and initial public offerings,' he adds. BlackRock MicroCap Equity Inv A Fund (NASDAQ:BMEAX - news) was the fourth best performer, posting a 24.87% return over the last three-months. It has a 53% weighting in technology stocks. The fund's top three holdings include Hi/fn (NASDAQ:HIFN - news) , Harmonic Inc. (NASDAQ:HLIT - news) and Emulex Corp. (NASDAQ:EMLX - news) . Year-to-date, the fund is up 87%. The Van Wagoner Micro-Cap Fund (NASDAQ:VWMCX - news) delivered a 24.85% return with 60% of its portfolio tied to technology. Year-to-date, the fund is up 108.5%. As to whether this move is temporary or apt to prevail, Greenwald says it's still too early to tell. 'I don't take a lot of significance from three months activity.' One interesting note: Looking at performance over the past 30 days, we noticed that several commodity based/natural resource funds have sneaked into the top 20 list. Geoff Bobroff notes that the recent run-up in oil and to a lesser extent precious metals may mean, 'the inflation that the Fed has feared appears to be on the horizon. This may bring some money and speculation into those focused funds,' he says. Two funds that caught our eyes are the Prudential Natural Resources B Fund (NASDAQ:PGRNX) , which returned 12.4% over the past month. Its holdings include Stillwater Mining (NYSE:SWC - news) and Anglo American Platinum (NASDAQ:AAPTY) . Also, the Oppenhiemer Real Asset fund (NASDAQ:QRAAX - news) has such holdings as crude oil futures, and debt and equity instruments. It was up 11% last month and has returned 35% year-to-date. But not everyone can be a winner. According to Morningstar, the group average of 2970 funds lost 4.67% for the quarter. Better luck next time.