Funds That Bought Tech at the Wrong Time
Some offerings loaded up on tech stocks as the bear market roared.
It's a lot easier to say now that 2000 is in the rearview mirror, but last year was a lousy time to buy technology stocks. Yet, a lot of mutual-fund managers decided to dedicate significantly more of their portfolios to the battered technology sector in the teeth of its worst bear market in decades.
We looked in Morningstar's database for domestic-stock funds that increased the technology weightings of their portfolios between the end of 1999, when the Nasdaq Composite was steadily pushing through new highs almost daily, and the close of last year, when the technology-stock-filled index posted nearly a 40% loss and was down more than 50% from its March high. Not surprisingly, most of the funds that boosted their tech positions fell heavily last year and are still falling this year.
Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.