When a fund has "Wired" in its name you probablydon't expect it to hold companies that sell underwear,insurance or oil. But the fund world's a funny place.

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Since we started the I Own What?! feature a fewmonths ago, some readers and industry vets have askedus to highlight the $80 million

(IWIRX) - Get Report

Investec Wired Index fund. Despite its decidedly New Economy andtechy name, many of the holdings seem downright dowdy,with stocks like retail giant


, insurer

American International Group

and oil titan



We're finally getting around to covering it now, just as it's in the process of swallowingInvestec's young and vanishing


Internet.comIndex and


Wireless World funds, home to acombined $18 million.

The upshot: The low-tech "Wired" fund absorbing a"wireless" fund and a Net fund illustrates why youshould always skim through a fund's prospectus andholdings before letting its performance and nameconvince you of where and how it will wisely investyour money.

The Wired fund tracks an index of 40 stocks pickedby a steering committee organized by the folks at


magazine, which bills itself as "the journal ofrecord for the future." These folks look for companiesthat display at least one of the followingattributes, some of which seem like plain-old nounsrather than descriptors: globalism, communication,innovation, technology and strategic vision. Thestocks they pick are then weighted in the index by theirmarket capitalization, with $30 billion used as amarket-cap ceiling.

Given the fund's name you would expect atech-heavy portfolio, but with those fuzzy criteriait's not a surprise that at the end of last month itheld shares of companies like



State Street

and even (gasp!)


,though the bankrupt equity trading firm will no doubtdisappear from the index once it's rebalanced.

This eclectic approach helped the three-year-oldfund gain 69% in the heady days of 1999, but it's fallen17% and 29% in the past two calendar years. Over the past three years the fundaverages a 2.6% annual loss. That might not soundgreat, but it actually only trails the

S&P 500

byabout one percentage point and beats its average peerin the battered, tech-sick big-cap growth fundcategory, according to Chicago research houseMorningstar.

The problem with the fund isn't its returns, butthe expectations investors might logically have givenits name. As someone who's watched investors talkabout their research process in focus groups, I cansay that many would have assumed this is a tech sectorfund despite its classification elsewhere inMorningstar's database. For its part, competing fundtracker Lipper gives the fund an ambiguous andgeneric "sector" classification.

Now let's imagine the pickle faced by the fewfolks owning shares of Investec's Internet.com Indexand Wireless funds. These two funds, as you mightexpect, put the lion's share of their modest assets intothe tech and telecom sectors, respectively. If you hadbought shares of these funds, you expected to be investedin tech and telecom stocks, but now you're going toshift into the vague realm of the Wired Index fund.Picture young Shep buying shares of a "wireless"fund, only to end up in the "Wired" fund, and you'llget the picture.

The bottom line for Shep and the rest of us isthat you need to do your homework before you buyshares of a fund.

Ian McDonald writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

imcdonald@thestreet.com, but he cannot give specific financial advice.