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Our Take on the Quarter's Best-Performing Funds

It might not be 1999 again, but tech funds are at the top of the charts.

Amy Arnott, 03/21/2003

<P>We've always warned about the perils of chasing short-term performance, and this quarter's top-performing funds are no exception. While most stock-fund categories have continued to bleed red ink for the year to date through March 17, 2003, funds that invest in technology-related stocks have hit the top of the charts.</P> <P>Some investors have been speculating on an upturn in the semiconductor cycle, and other tech-related industries such as wireline equipment and data networking have also bounced higher in the hopes of better days ahead. </P> <P>Investors should bear in mind that technology funds are highly specialized offerings that carry a considerable amount of risk, though. Their hefty expense ratios are another drawback. </P> <P>With commodity prices surging, Oppenheimer Real Asset <?XML:NAMESPACE PREFIX = MSTR /?><MSTR:SECURITY>QRAAX</MSTR:SECURITY> has been another top performer. The fund has benefited from higher prices on oil, gas, and other commodities. But this fund also fills a highly specialized role and is probably too volatile for most investors' portfolios. </P> <TABLE cellSpacing="0" cellPadding="0" width=578 border="0" > <TD><FONT face="Times New Roman" size=3><FONT size=3> <TABLE cellSpacing="0" cellPadding="0" width=422 border="0" > <TD vAlign="bottom" align="left" bgColor="#999999" colSpan=4><FONT face="Trebuchet MS, Arial, Helvetica" color="#ffffff" size="-2" ><B>Top-Performing Funds in 2003's First Quarter*</B></FONT></TD> <TD vAlign="bottom" align=right><IMG height=5 src="http://im.morningstar.com/im/dot_clear.gif" width=182></TD> <TD vAlign="bottom" align=right><IMG height="1" src="http://im.morningstar.com/im/dot_clear.gif" width=70></TD> <TD vAlign="bottom" align=right><IMG height="1" src="http://im.morningstar.com/im/dot_clear.gif" width=70></TD> <TD vAlign="bottom" align=right><IMG height="1" src="http://im.morningstar.com/im/dot_clear.gif" width=100></TD> <TD vAlign="top" align=right> </TD> <TD vAlign="top" align=right> <P><FONT face="Trebuchet MS, Arial, Helvetica" color=#999999 size="-2" ><B>Year-to-Date<BR>Return ( % )</B></FONT></P></TD> <TD vAlign="top" align=right> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" color=#999999 size="-2" ><B>Net Assets<BR>( $mil )</B></FONT></DIV></TD> <TD vAlign="top" align="left" > <DIV align="center"><FONT face="Trebuchet MS, Arial, Helvetica" color=#999999 size="-2" ><B>Morningstar<BR>Rating</B></FONT></DIV></TD> <TD vAlign="top" align=right colSpan=4 height=4><IMG height=5 src="http://im.morningstar.com/im/dot_clear.gif" width=422></TD> <TD vAlign="top" align="left" ><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" ><STRONG>Amerindo Technology Fund</STRONG> <MSTR:SECURITY>ATCHX</MSTR:SECURITY> has huge positions in Internet stocks, and its ups and downs can be extreme.</FONT></TD> <TD vAlign="top" align=right> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" >16.88</FONT></DIV></TD> <TD vAlign="top"> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" >59</FONT></DIV></TD> <TD vAlign="top" align=right><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" ><IMG height="1"6 src="http://im.morningstar.com/im/2Stars.gif" width=74></FONT></TD> <TD vAlign="top" align=right colSpan=4><IMG height=9 src="http://im.morningstar.com/im/422x9rule.gif" width=422></TD> <TD vAlign="top" align="left" ><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >Gut-wrenching losses illustrate the downside of <STRONG>ProFunds UltraOTC</STRONG>'s <A href="http://quote.morningstar.com/switch.html?ticker=UOPIX" ><MSTR:SECURITY>UOPIX</MSTR:SECURITY></A> leveraged approach.</FONT></TD> <TD vAlign="top" align=right> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" >16.40</FONT></DIV></TD> <TD vAlign="top" align="left" > <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" >167</FONT></DIV></TD> <TD vAlign="top" align=right><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" ><IMG height="1"6 src="http://im.morningstar.com/im/1Stars.gif" width=74></FONT></TD> <TD vAlign="top" align=right colSpan=4 height=5><IMG height=9 src="http://im.morningstar.com/im/422x9rule.gif" width=422></TD> <TD vAlign="top" align="left" ><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ><STRONG>Red Oak Technology Select Fund</STRONG> <A href="http://quote.morningstar.com/switch.html?ticker=ROGSX" ><MSTR:SECURITY>ROGSX</MSTR:SECURITY></A> is about as risky as they come, and its concentrated portfolio leads to extreme gyrations in returns.</FONT></TD> <TD vAlign="top" align=right> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >12.35</FONT></DIV></TD> <TD vAlign="top" align="left" > <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >241</FONT></DIV></TD> <TD vAlign="top" align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ></FONT><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" ><IMG height="1"6 src="http://im.morningstar.com/im/2Stars.gif" width=74></FONT></TD> <TD vAlign="top" align=right colSpan=4><IMG height=9 src="http://im.morningstar.com/im/422x9rule.gif" width=422></TD> <TD vAlign="top" align="left" height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >Diversification benefits alone may not be enough to convince investors to find a place for <STRONG>Oppenheimer Real Asset Fund</STRONG> <MSTR:SECURITY>QRAAX</MSTR:SECURITY>.</FONT></TD> <TD vAlign="top" align=right height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >11.29</FONT></DIV></TD> <TD vAlign="top" align="left" height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >224</FONT></DIV></TD> <TD vAlign="top" align=right height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ></FONT><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" ><IMG height="1"6 src="http://im.morningstar.com/im/4Stars.gif" width=74></FONT></TD> <TD vAlign="top" align=right colSpan=4><IMG height=9 src="http://im.morningstar.com/im/422x9rule.gif" width=422></TD> <TD vAlign="top" align="left" ><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ><STRONG>RS Information Age Fund</STRONG> <MSTR:SECURITY>RSIFX</MSTR:SECURITY> has a shot at succeeding in a sustained tech rally, but it's so risky that it's probably inappropriate for the vast majority of investors. </FONT></TD> <TD vAlign="top" align=right> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >10.33</FONT></DIV></TD> <TD vAlign="top" align="left" > <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >51</FONT></DIV></TD> <TD vAlign="top" align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ></FONT><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" ><IMG height="1"6 src="http://im.morningstar.com/im/3Stars.gif" width=74></FONT></TD> <TD vAlign="top" align=right colSpan=4><IMG height=9 src="http://im.morningstar.com/im/422x9rule.gif" width=422></TD> <TD vAlign="top" align="left" height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ><STRONG>TCW Galileo Aggressive Growth Equities</STRONG> <MSTR:SECURITY>TGMCX</MSTR:SECURITY> simply has too much sector- and issue-specific risk. Investors seeking mid-cap growth exposure can find smoother rides with a more diversified portfolio elsewhere.</FONT></TD> <TD vAlign="top" align=right height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >9.76</FONT></DIV></TD> <TD vAlign="top" align="left" height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >97</FONT></DIV></TD> <TD vAlign="top" align=right height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ></FONT><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" ><IMG height="1"6 src="http://im.morningstar.com/im/2Stars.gif" width=74></FONT></TD> <TD vAlign="top" align=right colSpan=4><IMG height=9 src="http://im.morningstar.com/im/422x9rule.gif" width=422></TD> <TD vAlign="top" align="left" height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ><STRONG>Enterprise Technology Fund</STRONG> <MSTR:SECURITY>EIFBX</MSTR:SECURITY> has a broader take on the Internet sector than most, and management will hold mainstream technology and even some nontechnology stocks alongside pure-play dot-coms.</FONT></TD> <TD vAlign="top" align=right height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >9.63</FONT></DIV></TD> <TD vAlign="top" align="left" height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >52</FONT></DIV></TD> <TD vAlign="top" align=right height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ></FONT><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" ><IMG height="1"6 src="http://im.morningstar.com/im/2Stars.gif" width=74></FONT></TD> <TD vAlign="top" align=right colSpan=5><IMG height=9 src="http://im.morningstar.com/im/422x9rule.gif" width=422></TD> <TD vAlign="top" align="left" height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ><STRONG>AXP Global Technology</STRONG> <MSTR:SECURITY>AXIAX</MSTR:SECURITY> fared poorly in its inaugural two years, but things are finally looking up. The new management team includes an ex-Fidelity tech-fund manager.</FONT></TD> <TD vAlign="top" align=right height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >9.43</FONT></DIV></TD> <TD vAlign="top" align="left" height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >126</FONT></DIV></TD> <TD vAlign="top" align=right height=44> <DIV align="center"><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ></FONT><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" >N/A</FONT></DIV></TD> <TD vAlign="top" align=right colSpan=5><IMG height=9 src="http://im.morningstar.com/im/422x9rule.gif" width=422></TD> <TD vAlign="top" align="left" height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ><STRONG>Berkshire Focus Fund</STRONG>'s <MSTR:SECURITY>BFOCX</MSTR:SECURITY> history leaves much to be desired, and we're also bearish about its prospects.</FONT></TD> <TD vAlign="top" align=right height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >9.19</FONT></DIV></TD> <TD vAlign="top" align="left" height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >23</FONT></DIV></TD> <TD vAlign="top" align=right height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ></FONT><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" ><IMG height="1"6 src="http://im.morningstar.com/im/1Stars.gif" width=74></FONT></TD> <TD vAlign="top" align=right colSpan=5><IMG height=9 src="http://im.morningstar.com/im/422x9rule.gif" width=422></TD> <TD vAlign="top" align="left" height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ><STRONG>Alliance Emerging Market Debt</STRONG> <A href="http://quote.morningstar.com/switch.html?ticker=AGDAX" ><MSTR:SECURITY>AGDAX</MSTR:SECURITY></A> is much too risky for conservative and mainstream bond investors. Intrepid emerging-markets-bond fans with long time horizons, on the other hand, should check it out.</FONT></TD> <TD vAlign="top" align=right height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >9.16</FONT></DIV></TD> <TD vAlign="top" align="left" height=44> <DIV align=right><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" >252</FONT></DIV></TD> <TD vAlign="top" align=right height=44><FONT face="Trebuchet MS, Arial, Helvetica" size="-2" ></FONT><FONT face="Trebuchet MS, Arial, Helvetica" color=#000000 size="-2" ><IMG height="1"6 src="http://im.morningstar.com/im/3Stars.gif" width=74></FONT></TD> <TD vAlign="top" align=right colSpan=5><IMG height=9 src="http://im.morningstar.com/im/422x9rule.gif" width=422></TD> <TD vAlign="bottom" align="left" colSpan=4><FONT face="Trebuchet MS, Arial, Helvetica" color=#999999 size="-2" >* Table includes the top-performing funds in Morningstar's coverage universe. <BR>Data is through 03-17-03.</FONT></TD></TABLE></FONT></FONT></TD> <TD><FONT face="Times New Roman,Times" color=#000000 size=3><BR></FONT></TD></TABLE>

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