Science and technology mutual funds are up 35% so far this year, according to Lipper. While they are grateful for the returns after last years 43% decline, even the managers of these funds are surprised by the numbers, Reuters reports. And many are worried that investors will mistakenly think the days of astounding returns in this sector have returned.
"The numbers can be a bit deceptive," Kevin Landis, manager of the Firsthand Technology Value fund, told Reuters. Landis explained that many technology stocks that were trading well about $100 and that had crashed to the $1 range are now in the single-digit or low double-digit range. In terms of percentages, these levels represent tremendous increases from the bottom but are still way below what the market once valued these stocks, Landis warned.
"You can get a dramatic bounce off the bottom, and so I would say to proceed cautiously but do your research," Landis said. Darren Cherzitz said he looks for technology companies that are beginning to earn profits and expand their scale. Nonetheless, he warned: "This is still a volatile sector. Companies pop up and then disappear."
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.