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Fund investors were wrong to schlep out onto the tech sector's shakiest limbs over the past few years, but fund companies held the ladder.

Today, the Big Screen sifts a few ultrafocused types from the tech-fund ocean to highlight how both fund companies and investors made ill-advised bets on snazzy slivers of the sector du jour.

At the end of 1998, there were 50 tech funds, nearly all of them scattering their assets across the whole sector. But steep gains the following year led to a record $42 billion in inflows, and fund companies rolled out more than 100 new tech funds to capture some of that money -- just as tech stocks finally lost their steam.

To stand out from the crowd, many of these funds focused on the hottest and most volatile parts of the mercurial sector. Consequently, these narrow portfolios looked and performed more like stocks than funds, making you wonder why anyone thought they were a good idea. If investors bought a mutual fund to get cheap access to a broad portfolio of stocks, these funds did just the opposite.

"

Fund marketing people were driven to differentiate themselves, so they started focusing on hot areas," says Burt Greenwald, a Philadelphia-based fund consultant. "All of a sudden, it wasn't just tech or telecom, but wireless, etc. These funds were the foam on top of the

Nasdaq

bubble."

Nothing but Net

Let's start with Net funds. At the end of 1998, there were four, but some 20 more have launched since then. The five biggest of those 20 funds, including

(GITAX) - Get Report

Goldman Sachs Internet Tollkeeper and

(FNINX)

Fidelity Select Networking and Infrastructure, have lost more than half their value over the past 12 months, according to Chicago fund-tracker Morningstar.

As some Net funds focus mostly on dot-coms and others stretch the definition to include any company with a Web site, there's a range of returns in this pack. At one end, you have the dot-com-focused

(JAMFX) - Get Report

Jacob Internet fund, down more than 90% since its inception at the start of last year, and at the other you have the tech-light

(WWWEX) - Get Report

Kinetics Internet Emerging Growth fund, which is down just 4% over the past year.

No matter how you slice it, you're probably better off with a broader tech fund where your manager can invest as much or as little of your money in Net stocks as he or she sees fit.

Even if you think a strictly Net-focused fund makes sense, it's tough to figure out a fund that centers on shares of business-to-business, or B2B, shops such as

Ariba

(ARBA)

and

CommerceOne

(CMRC)

, both down more than 88% over the past 12 months.

How rough can it be when you focus on a white-hot corner of the tech sector just as it's about to go cold? The

B2B Internet HOLDRs

(BHH)

fund, an exchange-traded basket of B2B stocks, is down 81% over the past year. And the

(BTBAX)

Amerindo Internet B2B fund is down more than 68% over the same stretch.

The folks at

Turner Investment Partners

figured out that hitching their wagon to a slice of the tech sector wasn't a great idea. After launching their B2B E-Commerce and Wireless funds last year, they merged them into the

(TBTBX)

Turner New Enterprise fund in July. The new fund can basically invest wherever its managers see the ripest growth opportunities, not just in B2B or wireless stocks.

Some did jump on the wireless bandwagon after

Qualcomm's

(QCOM) - Get Report

2,620% gain in 1999, and stayed there. It hasn't worked out too well. In a miserable year for the telecom sector, wireless has been a lonely spot. Of the four wireless funds launched last year, all are way under water, and just one, the

(FWRLX) - Get Report

Fidelity Select Wireless fund, is down less than the average telecom fund's 42% tumble. The

(WIREX) - Get Report

Wireless and

(WCPIX) - Get Report

ProFunds Ultra Wireless funds have both lost more than half their value over the past 12 months, similar to the narrow sector's bellwethers such as

Nokia

(NOK) - Get Report

and

Ericsson

(ERICY)

.

Geographically Speaking

Another questionable approach to tech investing is to focus on a country or region, such as the

India Technology

fund, the

(MATFX) - Get Report

Matthews Asian Technology fund and the

(MNIAX)

Munder International NetNet fund. Usually funds either focus on a sector or a foreign market, not a sector within a foreign market. Because many sector funds are designed to let a portfolio manager invest in both foreign and domestic stocks, you'd probably be better off with a broader tech fund that could shift money overseas when it seemed sensible, rather than as a rule.

In fact, these funds have leeway, too. The India Technology fund, for instance, can invest in companies run by Indian executives, but that bizarre flexibility only underscores the gimmicky nature of these funds.

Beyond these niche offerings, fund marketers also dreamed up a convertible bond fund that focused on tech shops' debt (

(CVTAX)

Calamos Convertible Technology) and even a socially responsible tech fund (

(CTHAX) - Get Report

Calvert Social Investment Technology).

Given the tech sector's fall and the abundance of small, struggling tech funds out there, many of these oddities are doomed to be merged away or simply cashed out. But let's remember them the next time fund companies hawk subsector fare that zeroes in on alternative energy plays or biotech companies. Funds like these are more fun to watch than to own.

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.