CONTINUED
Like Broadcom, Marvell Technology has a diverse customer base, with chips for a variety of products. That mix, in high-growth areas such as game consoles, helped the stock gain 74.3% for the period.
Meanwhile, more mainline networking stocks, such as Cisco, have come on strong in recent weeks, thanks to forecasts for strong corporate spending. Cisco’s solid earnings report on Feb. 8 sent share prices spiking, and the stock is up 13.6% in 2006.
Many forecasters expect a good year in the networking space. The Semiconductor Industry Association predicts mobile phone sales to grow 13% this year. UBS and others are high on the stocks of companies with exposure to notebooks, multimedia handsets, and broadband access. IGN is full of such companies.
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Standard & Poor’s expects lean chip inventories and high plant capacity utilization in the semiconductor industry, while UBS forecasts modest growth, again favoring players in the phone handset market.
Indeed, recent weeks have provided a lot of good news for IGN shareholders. Still, the fund has seldom matched its value at inception. Granted, July 2001 wasn’t the most auspicious time to start such a fund. IGN shares hit the street more than a year after the NASDAQ marked its all-time high, in the middle of the post-bubble tech slide.
From inception to the fall of 2002, IGN shares lost more than 70% of their value. Granted, IGN rebounded in 2003, with shares more than doubling, and has been mostly steady since. But the fund’s NAV started at $34.50, and last week was only the second time its been above that figure, at $34.70.
IGN’s recent strength should not obscure the fact that the fund is vulnerable to key risks associated with both sector funds and tech funds. Its high concentration courts risk, and its tech-centric theme has historically taken shareholders for speedy, steep rides in both directions. Witness its standard deviation of 30.55, or its early history. Interested investors should consider the fund as a nice part o f their portfolio—and should carefully consider its risks.
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Performance:
| |
IGN (NAV)
|
vs Category*
|
| YTD** |
+11.9%
|
+8.7%**
|
| 2005 |
+2.3%
|
-0.3%
|
| 2004 |
+10.1%
|
+6.8%
|
| 2003 |
+104.6%
|
+43.2%
|
| 2002 |
-56.0%
|
-12.5%
|
| 2001 |
-26.4%
|
-6.7%
|
*Category: Specialty—Technology
**Through 2/17/06
***vs. S&P 500
Source: Morningstar 
