More Funds Ride Tech's Four Horsemen

The mutual fund world never stopped riding the four horsemen of technology -- in fact, the cavalcade has exploded in size.

Microsoft(MSFT), Dell(DELL), Intel(INTC) and Cisco(CSCO) -- riding high again, with all four climbing more than 20% during the past month's rally -- have had some hard times since the glory days of early 1999.

But mutual funds, as a whole, never stopped banking on these four stocks during and after the tech bubble burst. In fact, according to research conducted by fund-tracker Morningstar for TheStreet.com, more and more large-cap funds have gotten in: The number of funds owning Dell, for instance, has more than doubled to 746 from 316 back in January 1999. Moreover, funds of both growth and value stripes have purchased the four stocks in droves -- in many ways it's a conundrum, given that Cisco, for instance, looks fairly pricey to some, yet value-fund ownership of the networker has tripled. Likewise, concerns about the technology-spending drought raises the question of whether some of these four merit the "growth" label.

Do the smart money bets on Dell, Cisco, Intel and Microsoft augur great things for technology -- or does it mean managers still haven't mastered their tech addiction? Probably neither. Many fund managers are obligated to invest some portion of their holdings in tech; one explanation for the surge in interest is that, on a relative basis, these are the best of the worst. "One thing I hear from fund managers all the time is that these companies aren't going away," said Paul Herbert, a growth fund analyst at Morningstar. "Some accept that this is as good as it gets."

A closer look at large-cap fund ownership of these four stocks answers some questions about where the smart money thinks these stocks are heading. In each case, analysts and RealMoney columnist Cody Willard weigh in to make their assessments as well. If you've given up on these stocks individually and think this doesn't apply to you, think again. If you own a large-cap fund, you more likely than not have a stake in each of them: All four turn up in more than half of the large-cap funds' portfolios.