Mutual Fund Investing
10 Best, 10 Worst Technology Funds
Kevin Baker
09/05/08 - 05:25 PM EDT
As the Dow lost 4.40% and the S&P 500 slipped 4.85% this week, the technology-heavy Nasdaq-100 index fared worse, tumbling 7.32% in the four trading days ending Thursday. Technology funds, excluding inverse funds, also shed the same amount on average. So far this year, the group has plummeted 19.33%.
The economic picture is dim. Challenger, Gray & Christmas reported that August firings rose 12% to 88,736 compared with 12 months earlier, with job losses expected to continue through the year. More than 3.4 million Americans collecting unemployment benefits are more interested in buying the basics -- food, rent and gasoline -- than the latest computer upgrade or flat-screen TV.
Semiconductor funds, the most economically sensitive of the technology funds, crashed, with the Ultra Semiconductor ProShares(USD Quote), leveraged 200% to the Dow Jones U.S. Semiconductor Index, losing a fifth of its value, or 20.64%.
The second-worst performer, ProFunds Semiconductor UltraSector ProFund(SMPIX Quote), plunged 17.34%, dragged down by its 150% leverage to the same index. Index members leading the way include MEMC Electronic Materials(WFR Quote), down 20.40%; Marvell Technology Group(MRVL Quote), with a loss of 19.11%; Silicon Image(SIMG Quote), minus 17.25%; and ON Semiconductor(ONNN Quote), with a decline of 16.17%. Another holding, National Semiconductor(NSM Quote) sank 11.02%, hurt by lower earnings caused by saturated and slowing demand for mobile-phone handset chips.
The Dow Jones U.S. Technology Index is tracked by the Ultra Technology ProShares(ROM Quote), at 200% leverage, and by the ProFunds Technology UltraSector ProFund(TEPIX Quote), at 150% leverage, resulting in losses of 15.79% and 12.66%, respectively. Holdings of Ciena(CIEN Quote) nosedived 26.67%, as the company warned that telecom firms are delaying new orders due to economic uncertainty. Likewise, Corning(GLW Quote) shares shattered 20.08% on a less-positive outlook for LCD TV screen glass. Dell(DELL Quote) dropped 19.24% as the company pondered a dramatic change in strategy, potentially selling off worldwide manufacturing plants to save as much as $3 billion in labor and related costs.
| Worst PerformingTechnology Sector Funds for the Week Ending Thursday | ||||
| Fund | Ticker | Rating | Fund Type | 1 Week Total Return |
| Ultra Semiconductor ProShares | USD | E | ETF | -20.64% |
| ProFunds Semiconductor UltraSector ProFund | SMPIX | E- | Open-End | -17.34% |
| Ultra Technology ProShares | ROM | E+ | ETF | -15.79% |
| Internet Infrastructure HOLDRs Trust | IIH | C+ | ETF | -13.80% |
| ProFunds Technology UltraSector Profund | TEPIX | E | Open-End | -12.66% |
| Fidelity Advisor Electronics Fund | FELAX | E | Open-End | -11.40% |
| Fidelity Select Electronics Portfolio | FSELX | E | Open-End | -11.09% |
| iShares S&P North American Tech-Semicond Index Fund | IGW | E+ | ETF | -10.96% |
| Rydex Series - Electronics Fund | RYSIX | E | Open-End | -10.93% |
| SPDR S&P Semiconductor ETF | XSD | E | ETF | -10.55% |
| Source: Bloomberg & TheStreet.com Ratings | ||||
| Best PerformingTechnology Sector Funds for the Week Ending Thursday | ||||
| Fund | Ticker | Rating | Fund Type | 1 Week Total Return |
| UltraShort Semiconductors ProShares | SSG | A- | ETF | 26.37% |
| UltraShort Technology ProShares | REW | C- | ETF | 18.55% |
| Rydex Inverse 2X S&P Select Sector Technology ETF | RTW | U | ETF | 16.24% |
| UltraShort Telecommunications ProShares | TLL | U | ETF | 3.35% |
| SPDR S&P International Telecommunications Sector ETF | IST | U | ETF | 0.42% |
| Kinetics Internet Emerging Growth Fund | WWWEX | E | Open-End | -2.29% |
| PowerShares Dynamic Hardware & Consumer Electronics Portfolio | PHW | D- | ETF | -2.61% |
| Telecom HOLDRs Trust | TTH | C- | ETF | -2.62% |
| iShares Dow Jones US Telecommunications Sector Index Fund | IYZ | C- | ETF | -2.66% |
| Vanguard Telecommunication Services ETF | VOX | C+ | ETF | -3.24% |
| Source: Bloomberg & TheStreet.com Ratings | ||||