Marketocracy Tech Plus Fund: We're number two!

[archerships]

My employer (Marketocracy) just got some good news: according to Bloomberg, our Tech Plus fund (symbol: TPFQX) was the #2 ranked tech sector fund for the three years ending 2003.

Here's the press release:



http://markets.chicagotribune.com/custom/tribune-interactive/html-story.asp?guid=%7BAF44A55E%2DC878%2D4546%2DAB3F%2DAC0804A9D3D7%7D&symb=&siteid=chicagotribune&

Marketocracy Technology Plus Fund Ranked No. 2 Technology Sector Fund for 3 Years According to Bloomberg

1/8/2004 9:10 AM


LOS ALTOS, Calif., Jan 8, 2004 (BUSINESS WIRE) -- Marketocracy Funds(2) today announced that the Technology Plus Fund (TPFQX), was the #2 ranked technology sector fund for the 3 years ended Dec. 31, 2003, according to Bloomberg(3). As of Dec. 31, 2003, the Fund has returned 12.7% since inception (December 29, 2000). During the same period, the NASDAQ Index(4) was down -17.9% and the S&P 500 Index(5) was down -11.7%. According to the Wall Street Journal,(6) the Fund's average annual return for the 3 years ended Dec. 31, 2003 was 4.06% as compared to the average Science & Technology fund which annually lost -17.2% over the same period.


Fund Delivered Higher Return with Less Risk


The combination of solid stock picking and hedging helped the Technology Plus Fund outperform its peers and the major market indices with less risk. Above-market returns are usually accompanied by above-market risks. The Technology Plus Fund, however, delivered its returns while maintaining a beta(7) of 0.81 since inception compared to the NASDAQ Index's beta of 1.38 for the same period.


"The Fund invests in Info Technology, Telecommunications, and Healthcare stocks, generally the fastest growing sectors of the economy, because we believe that in the long-run, growth is the primary driver of stock prices," explained Dr. Paul McEntire, co-portfolio manager for the Fund. "To reduce the risk and moderate the short-term volatility inherent in technology stocks, the Fund hedges up to 40% of the portfolio."


Performance Information and Fund Availability


The following is the performance summary for the Fund as of 12/31/03:

Comments

[blueadept.livejournal.com]

This means that the fund will get a large influx of capital (people see successful fund -> people put money into successful fund); it will get much harder to manage (you can't move huge sums around as fast because it really throws the market around - and not at all favorably for the person who's moving the large amounts of money around); and it will perform worse. Some studies have shown that generally funds that outperform the general market for a few years go on to severely underperform in the next years.

[crasch.livejournal.com]

You're right that it will become harder for the fund to find places to invest once it becomes much bigger. However, at about $5 million in assets, it still has a long way to go before it's big enough to start pushing the market around very much.