What about Altamira E-business fund?

Question: Could you comment on the viability of the Altamira RRSP e-Business Fund which has dropped by at least 50%. Is it a good time to average down with a lump sum payment? – A.S.

Gordon’s answer: The Altamira e-Business Fund (parent of the RRSP version) had a great run in the first year after it was launched, recording an almost unbelievable gain of 190% in 1999 when the dot-com craze was at its peak. However, the Nasdaq crash of 2000 brought it back to earth with a thud. Over the year to Nov. 30, the fund dropped 28.6% in value. The only consolation was that those who got in early still ended up well ahead of the game. From its inception in November 1998 to Jan. 5, 2001, the fund shows a total advance of 83.4%.

Despite the name, the fund does not invest solely in dot-com enterprises. Its mandate is to seek out any companies that are likely to benefit from the Internet revolution. That’s why you’ll find companies like FedEx and Time Warner in the Top 10 holdings, as well as the expected names of Nortel, Cisco Systems, Yahoo, eBay, etc.

It is not appropriate for me to give specific personal investment advice, so I cannot comment on whether avaging down is a good idea at this time. I can tell you, however, that this fund was recently dropped from the Recommended List of my Mutual Funds Update newsletter with the suggestion that investors might consider a switch to Altamira Science and Technology Fund which has a broader mandate.