ETF Focus Feature Article
CBS-CNet Deal Boosts Tech Funds
Kevin Baker
05/17/08 - 09:23 AM EDT
The average technology fund we track, excluding the funds that short the sector, climbed 3.85% this week as the media consolidation of Internet stocks continues.
The biggest news in this area is the
CBS(CBS Quote - Cramer on CBS - Stock Picks) purchase of
CNET Networks(CNET Quote - Cramer on CNET - Stock Picks) for about $1.8 billion. The
ProFunds Internet UltraSector(INPIX Quote - Cramer on INPIX - Stock Picks) was prepositioned to benefit from the 48.18% skyrocketing of CNET shares.
The
B2B Internet HOLDRs Trust(BHH Quote - Cramer on BHH - Stock Picks), which does not replace companies in its portfolio once they are no longer traded, is down to just two holdings.
However, since the fund is 85.2%
Ariba(ARBA Quote - Cramer on ARBA - Stock Picks) and 14.8%
Internet Capital Group(ICGE Quote - Cramer on ICGE - Stock Picks), and those shares rose 14.40% and 4.47% in the five trading days ending Thursday, May 15, this fund tops our best-performing list.
The second-place fund,
Internet Infrastructure HOLDRs(IIH Quote - Cramer on IIH - Stock Picks), is down to just eight holdings. At 59.1% of assets,
VeriSign (VRSN Quote - Cramer on VRSN - Stock Picks) dominates the short list of holdings. VeriSign shares gained 11.02% as the company announced the milestone of one million active secure sockets layer certificates that provide security to the Web sites of most of the Fortune 500 and the 40 largest banks worldwide.
The fund's third-largest holding,
RealNetworks (RNWK Quote - Cramer on RNWK - Stock Picks), had an even better week, rising 15.9% on news of an impending spinoff of its games division and higher forecasted sales.
Rated E-, the generally poor-performing
ProFunds Mobile Telecommunications UltraSector(WCPIX Quote - Cramer on WCPIX - Stock Picks) bounced back by 11.66% for the period under review. Its holding of
Leap Wireless(LEAP Quote - Cramer on LEAP - Stock Picks) jumped 19.82% on smaller losses than the prior year and the addition of 230,000 new customers this quarter. Up a 17.04%, some
Telephone & Data Systems(TDS Quote - Cramer on TDS - Stock Picks) shareholders were shocked to learn that the company had rejected a buyout bid estimated at $97 a share, well above Thursday's close of $47.81. Clearly, insiders believe the company is worth more.
| Best-Performing Technology Funds for the Week Ending Thursday May 15 |
| Fund |
Ticker |
Rating |
Fund Type |
1 Week Total Return |
| B2B Internet HOLDRs Trust |
BHH |
E- |
ETF |
13.01% |
| Internet Infrastructure HOLDRs Trust |
IIH |
C+ |
ETF |
11.83% |
| ProFunds Mobile Telecom UltraSector ProFund |
WCPIX |
E- |
Open-End |
11.66% |
| Ultra Semiconductor ProShares |
USD |
E- |
ETF |
11.65% |
| ProFunds Internet UltraSector ProFund |
INPIX |
D |
Open-End |
9.72% |
| ProFunds Semiconductor UltraSector ProFund |
SMPIX |
E- |
Open-End |
8.87% |
| Ultra Technology ProShares |
ROM |
E- |
ETF |
7.26% |
| Munder Internet Fund |
MNNAX |
D- |
Open-End |
6.27% |
| Ultra Telecommunications ProShares |
LTL |
U |
ETF |
6.25% |
| First Trust Dow Jones Internet Index Fund |
FDN |
E+ |
ETF |
6.19% |
| Powershares Dynamic Networking Portfolio |
PXQ |
E- |
ETF |
5.57% |
| Source: Bloomberg & TheStreet.com Ratings |
On the downside, taking the worst of the beating this week are the two funds shorting their respective Dow Jones indices with 200% leverage. The
UltraShort Semiconductor ProShares(SSG Quote - Cramer on SSG - Stock Picks) lost 11.11%, while the
UltraShort Technology ProShares(REW Quote - Cramer on REW - Stock Picks) gave up 6.71%.
Of the semiconductor index members, the best performer was
RF Micro Devices(RFMD Quote - Cramer on RFMD - Stock Picks), which predicted a return to profitability next quarter.
The technology index member gaining the most this week was
Electronic Data Systems(EDS Quote - Cramer on EDS - Stock Picks), up 27.98% upon agreeing to be bought by
Hewlett-Packard(HPQ Quote - Cramer on HPQ - Stock Picks) for nearly $14 billion.
| Worst-Performing Technology Funds for the Week Ending Thursday May 15 |
| Fund |
Ticker |
Rating |
Fund Type |
1 Week Total Return |
| UltraShort Semiconductors ProShares |
SSG |
A |
ETF |
-11.11% |
| UltraShort Technology ProShares |
REW |
C |
ETF |
-6.71% |
| Kinetics Internet Emerging Growth Fund |
WWWEX |
D- |
Open-End |
-0.22% |
| Kinetics Internet Fund |
WWWFX |
B- |
Open-End |
0.31% |
| Fidelity Select Telecommunications Portfolio |
FSTCX |
D- |
Open-End |
0.85% |
| Fidelity Advisor Telecommunications Fund |
FTUAX |
D |
Open-End |
0.85% |
| Forward Emerald Opportunities Fund |
HSYTX |
U |
Open-End |
1.44% |
| Powershares Dynamic Media Portfolio |
PBS |
E+ |
ETF |
1.78% |
| Franklin Dynatech Fund |
FKDNX |
C |
Open-End |
1.78% |
| Hartford Global Communications Fund/The |
HGCAX |
A |
Open-End |
1.87% |
| Source: Bloomberg & TheStreet.com Ratings |
Both the
Dow Jones Industrial Average and the
S&P 500 Index have now gained back almost exactly 50% of their declines from their October 2007 highs, breaking through their downtrend resistance lines. Market strength over the next few weeks is crucial to determining if we are going to test the highs or the lows.
The tech-heavy Nasdaq 100 Index consolidated its advance at the 50% level earlier this month. In a bullish sign, this index moved up to the next Fibonacci retracement level of 61.8% this week.
For an explanation of our ratings,
click here.
