While some biotech funds have fared reasonably well over time, others, particularly more narrowly focused ones, have suffered from the same problems as Internet funds have. The buzz surrounding this new technology caused nanotech stocks to do spectacularly well in when small and microcap stocks in general were the markets best performers. In however, things have cooled considerably. In of this year, Merrill Lynch rolled out Nanotech Index NNZ. X of stocks all small and microcaps.

While some biotech funds have fared reasonably well over time, others, particularly more narrowly focused ones, have suffered from the same problems as Internet funds have. More ResourcesEmail us your comments on this articlePost on the Start Investing message boardGet daily dose of market newsSearch MSN the AnalystNanotech and the pitfalls of glomming on to trend in the hopes of making overnight riches. But the history of previous hot new technologies and the funds rushed to market to take advantage of them offers some sobering lessons for anyone tempted to jump on the latest investing bandwagon.

Internet stocks and GenentechDNA, news, msgs did among biotech stocks. Remember the Internet fund craze? By David Kathman, MorningstarIs there fund that specializes in nanotech stocks? It seems that this technology is the coming thing. For example, IntelINTC, news, msgs and Advanced Micro DevicesAMD, news, msgs have both used nanotechnology to create smaller, denser semiconductors, and Advanced MagneticsAVM, news, msgs has used it to create more accurate magnetic resonance imaging scans. Many of the purveyors of these funds are just jumping on the bandwagon and dont necessarily have any special expertise in the realm.

This has, of course, caught the attention of the market in fact, this is the second question about nanotech funds that weve received in the past couple of months. Sullivan, microcap manager with no particular expertise in biotech. Trendy mutual funds tend to appear frequently right near the peak of bubble. Internet funds sprouted like weeds between and and of them shouldnt have existed in the first place. The buzz surrounding this new technology caused nanotech stocks to do spectacularly well in when small and microcap stocks in general were the markets best performers.

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