After a serious tumble, tech managers retrench with core holdings.
By Pete Gallo
Returns for tech-focused hedge funds suffered a sharp decline in this year's first quarter, marked by a big selloff in Google, Baidu.com and other formerly highflying names that made 2007 a banner year for the Nasdaq Composite - and the sector.
After a gain of 12.5% last year, long/short technology hedge funds were down 5.55% through March, compared with a 1.1% loss for the Absolute Return Composite index. Thanks in part to their shorting skills, long/short tech funds are still miles ahead of the Nasdaq, which gave up 14.1% in the first quarter. The environment, however, remains treacherous, with few managers expecting a full-scale recovery to take place this year. As such, managers of dedicated tech portfolios and diversified long/short funds alike are scrambling to retrench, both tweaking their net and geographical exposures and concentrating on core...