Firsthand Technology Value Fund is on top of the world, but an impending change in managers could loosen the ground beneath its feet. Firsthand recently disclosed that Ken Kam -- half of the duo that has propelled this fund to earth-shattering returns -- will be leaving the firm in October to start his own shop. (Co-manager Kevin Landis will continue to guide the fund.)
Talk about going out on a high note: Only a few months past its fifth birthday, this offering sports the best five-year return in the Morningstar database.
Kam's surprise departure is a loss, but not a disaster. He and Landis divide their duties along sector lines: Landis handles the fund's technology stocks, while Kam runs the health care end of the portfolio.
Although the fund's health care names make up only about one-third of stock assets, they can have a big impact on performance. For example, the biotech company Immunex, which is one of the fund's top holdings, has enjoyed heady returns in 1999.
Kam will not abandon the fund's health care stocks entirely, though. Firsthand has reported that he will remain on board as a consultant, advising Landis about the fund's health care picks. However, it remains to be seen how much of the portfolio health care stocks will make up in the future. (Landis could not be reached for comment.)
Regardless of who is running the fund, it continues to be one of the most aggressive offerings around.
Kam and Landis like their portfolios highly concentrated and stuff lots of assets into their top picks. What's more, the fund's below-average median market cap demonstrates that they're often willing to wager a lot on small-cap firms. When those bets work well -- as they have in 1999 -- the fund can soar. But when the fund stumbles, the going can be rough.
With or without Kam, shareholders should continue to expect a wild ride.
Firsthand Technology Value Fund managers: Ken Kam and Kevin Landis Largest investment sector: Health Care Style: The fund's median investment is in growth stocks of companies with medium market capitalizations.
Total Returns as of 9/10/99
Three-year annualized: 44.65%
Five-year annualized: 51.46%
Risk vs. domestic equity funds: High
Morningstar rating: 5 stars
Maximum sales charge: None