The NASDAQ index of technology stocks is down 6.78 per cent since 5 March while losses on the NASDAQ Biotech index have been even worse, with the benchmark losing 21.13 per cent since 25 February.
Performance of indices in 2014
Source: FE Analytics
A number of previously top-performing funds such as Baillie Gifford Global Discovery and Standard Life UK Smaller Companies are among the funds to have taken severe hits.
The £134m Baillie Gifford Global Discovery rose an astonishing 55.76 per cent last year thanks in part to its high weighting to tech stocks: the five crown rated fund has 35.9 per cent in the tech sector, having held a similar weighting throughout last year and the one before.
However, the portfolio is down 5.79 per cent year-to-date, one of the very worst results in the IMA Global sector, having lost 12.86 per cent in the technology sell-off.
Performance of fund vs sector and index since 5 March
Source: FE Analytics
The largest position in the fund is 3.6 per cent in Ocado Group, the UK internet grocer whose shares have fallen 45 per cent since the end of February.
Electric car maker Tesla and UK stocks ASOS and Xaar are other top 10 holdings to have sold off heavily in recent weeks.
Also in the global sector Baillie Gifford Long Term Global Growth has an even higher weighting to tech at 43.7 per cent, and has also been hard hit, losing 10.82 per cent since 5 March.
JOHCM Global Select has 39.8 per cent in the tech sector and Henderson Global Growth 36.1 per cent and the funds have lost 8.4 per cent and 8.55 per cent respectively, putting them at 255 and 256 in the list of best returns since 5 March out of 261 funds.
One other notable fund that has been caught out by a high weighting to tech is the Standard Life UK Smaller Companies fund run by FE Alpha Manager Harry Nimmo.
The fund has just 15.7 per cent in tech sector but also has high weightings to the internet-based stocks which have led the slump: Telecom Plus, ASOS and Rightmove are the three largest holdings while Hargreaves Lansdown and Paypoint are also top-10 positions.
Performance of stocks over 1yr
Source: FE Analytics
Such has been the effect on the fund that it is now fourth quartile in the sector over three years.
Performance of fund vs sector over 3yrs
Source: FE Analytics
Standard Life Global Smaller Companies is run by Alan Rowsell in accordance with the principles of FE Alpha Manager Harry Nimmo.
The fund has 23.2 per cent in technology, and has also suffered in the recent sell-off, losing 3.65 per cent. The fund’s biggest holding is UK-based Telecom Plus, which has lost 13.34 per cent in the sell off after a year of strong gains.
Unicorn Free Spirit is another smaller company focused fund to have suffered, although it sits in the IMA UK All Companies sector.
The fund focuses on small-cap tech stocks and is top quartile over one, three and five year periods. However, it is down 6.18 per cent since the 5 March as the IMA UK All Companies sector has lost 4.67 per cent.
The five crown rated fund holds tech stocks such as Iomart Group, Dotdigital and SQS Software Quality Systems in its top 10.
Some specialist healthcare funds have also suffered hugely through the recent sell-off as they have been buying into the fast-growing tech stocks.
Gemma Game’s AXA Framlington Health is down 9.19 per cent since the biotech sell-off started, with its 3.9 per cent in Gilead a particular problem.
Gilead was at the centre of the storm in the sector after a democratic senator sent a letter to the company asking it to justify the pricing of a new drug. Amgen and Celgene are other biotech firms in the fund’s top 10 holdings.
The Invesco Global Healthcare fund has also suffered, losing 9.95 per cent in that time. Gilead is the fund’s largest holding at 3.7 per cent while Celgene and Biogen are also in the top 10.
Legg Mason Japan Equity has also been hit by the sell-off in tech and biotech stocks, losing 12.23 per cent since 28 February.
The fund has been one of the stand-out performers in the IMA Japan sector in recent years, topping the performance tables in 2011 and 2013 and returning an impressive 63.65 per cent in the latter year.
However, it is down 14 per cent this year, with most of the losses coming in the recent sell-off.
Performance of fund vs sector in 2014
Source: FE Analytics
The fund has 34.19 per cent in healthcare stocks and 22.76 per cent in technology, including a number of internet-based companies and recently launched biotech company Peptidream.
Standard Life Japan has also been hit hard, thanks to a weighting of 25.7 per cent to technology.
Legg Mason Clearbridge US Aggressive Growth is another fund to have taken a hit thanks to a weighting to biotech. It is down 4.59 per cent in the sell-off, fourth quarter results, as the average IMA North America fund has lost just 3.04 per cent.
The fund holds 32.84 per cent in healthcare, including biotech companies such as Amgen, and 21.56 per cent in tech.
JPM US Smaller Companies is down over 13 per cent during the period, with a combined 46.9 per cent in healthcare and tech, while Franklin US Opportunities has been the worst hit among large ca US funds.
The slump has also hurt many funds in the emerging markets sectors that had been doing very well in recent years thanks to a high weighting to internet and tech stocks which form a part of the consumer revolution in Chia and beyond.
Fidelity Emerging Markets did the best in last year’s downturn, but its high weighting to tech has caused it to fall into the bottom quartile in the sell-off.
GAM Star China Equity is top quartile over one, there and five years but bottom quartile in the sell-off thanks to a high weighting to tech, while Fidelity China Consumer has also taken a big hit, although it is still top over one year.
