From last year to early part of this year, many fund houses were promoting their technology funds. The usual reasons stated were the proliferation of mobile devices like tablets and smart phones. Apple was the favourite stock to talk about.  Recently, no one is talking much about technology anymore. The reason is obvious, tech has not performed lately.

Early this year, I took over a several portfolios from an existing client who had transferred his holdings from another adviser to consolidate his holdings under me. I was surprised to see that the only equity funds in the portfolios was a technology fund. After taking over, I proceeded to realign his portfolios and switched out the technology fund to 3 other equity funds. The black line represents the technology fund.

My rational were simple. I wanted to give my clients a diversified exposure. In my opinion, a single technology fund was too narrowly focused. And what if ...