Color the name dot-gone.
Monument Funds Group became the latest mutual fund company to back away from the Internet label when it announced Wednesday that the Monument Internet Fund, launched in November 1998 amid "dot-com" fever, has been refocused and renamed the Monument Digital Technology Fund.
The shift reflects "Monument's view that a narrow focus on dot-coms is no longer justified as the Internet now reaches into virtually all aspects of the business world," the Bethesda, Md.-based company said.
But fund industry analysts said the shift also reflects the stigma attached to the label "'Internet fund"--given that the 60 Net-focused funds in Morningstar Inc.'s database were down 30% year-to-date through Tuesday, on average.
Monument Internet, which rocketed 273% in 1999, has slumped nearly 40% so far in 2000. Some rival funds have fared worse: StockJungle.com Pure Play Internet is down 48%, Potomac Internet Plus is off 58% and Westcott Nothing But Net (the name must have sounded cool when it was launched) is down 49%.
With those numbers, "a lot of Internet funds are going to have trouble surviving in the long run," said Morningstar senior analyst Christopher Traulsen. As dejected investors sell out of the funds, some are likely to be merged with broader tech funds--or liquidated entirely.
Indeed, 1-year-old De Leon Internet 100 fund has already opted to liquidate.
In April, Investors Capital Internet expanded its name and focus to Investors Capital Internet & Technology, though the move has been no panacea: The fund still is down 32.5% this year.
CEO David Kugler said Monument's "new and broader focus on digital technologies recognizes the importance that hardware, software and service providers will have in terms of migrating every type of business and entertainment activity to the Web."
Morningstar noted that the Monument fund was already lightening up on Net content providers earlier in the year while bolstering its stakes in Net infrastructure firms such as Cisco Systems and Sun Microsystems.
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Net No More?
The Monument Internet Fund--which has lost about 40% of its share value year to date--will change its name to remove the Internet label, the fund's parent company announced.
Monthly closes and latest net asset value per share for Monument Internet Fund
Source: Bloomberg News