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Dreyfus Premier Tech Avoids Landmines

Regional Bells, Microsoft goose Dreyfus Premier Tech.

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Once again, Dreyfus Premier Technology Growth Fund (DTGRX) is trouncing the competition. Of course, it hasn't been able to completely sidestep the tech wreck--it has lost more than 20% this year, and that's on the heels of a 27% loss in 2000. However, those losses are relatively minor compared with those of many other tech funds lately, especially those that specialize in Internet names or smaller, more-speculative issues. 

Lately, manager Mark Herskovitz has been interpreting his mandate pretty broadly, emphasizing regional Bell operating companies (RBOCs). He thinks they look cheap and believes that their competition from small, upstart competitive local exchange carriers (CLECs) is fast fading. In such an iffy market for technology, owning Verizon (VZ) and BellSouth (BLS) has helped the fund quite a bit. Herskovitz is also giving more weight to Microsoft (MSFT) these days, but he cut his Cisco Systems (CSCO) position. He thinks that Cisco probably won't grow at the clip that it did and that competitors such as Juniper Networks (JNPR) (which he also owns) will continue to take market share from the networking giant.

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Catherine Hickey does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.