Retail cash flowing into tech funds stood at 74m in January this year compared with 238m a year earlier and 878m in March 2000. Tech fund ISA sales totalled 13m in January this year compared with 57m in January 2000 and a massive 345m in March last year, when the height of the tech boom coincided with the traditional surge of money into tax-free savings plans in the last month of the tax year. The rapid ebb and flow of tech share demand has also had an impact on financial services providers. But last year's pain for investors is mitigated by much brighter performance in the longer term. Analysts are divided as to the prospects for tech funds.
Some analysts say tech stocks look cheap, given the past year's falls.
While this might be so, others maintain they are still expensive by other historical standards. They argue it would be unwise to buy before better evidence emerges that valuations have bottomed out and profit growth has been restored. What analysts can agree on is that the seemingly indiscriminate flood of money into the tech sector early last year was an aberration unlikely to be repeated. It says the downturn of recent months was as indiscriminate as early 2000's price surge and presents attractive buying opportunities. Last year's retail investors may be unlikely to dash back to the Techmark after having their fingers burnt.