Firsthand Alternative Energy Fund

Firsthand Alternative Energy Fund

Average Annual Total Returns vs. Indices
As of June 30, 2017
Period Firsthand Alternative
Energy Fund
WilderHill Clean Energy Index S&P 500 Index
Since inception (10/29/07) -4.81% -16.22% 7.08%
5-Year 10.09% 0.01% 14.59%
3-Year -6.92% -14.03% 9.59%
1-Year 20.58% 14.02% 17.89%
Q2 '17 (not annualized) 8.95% 8.54% 3.09%

Datasheet

The Fund's performance information assumes reinvestment of all dividends and includes all Fund expenses, but does not reflect the impact of taxes. Performance data quoted represent past performance, which is not a guarantee of future results, and current performance may be lower or higher than the performance quoted. Both the return from and the principal value of an investment in the Fund will fluctuate so that any investor's shares, when redeemed, may be worth more or less than their original cost. To obtain performance as of the most recent month-end, please contact Firsthand Funds by calling 1.888.884.2675 or go to www.firsthandfunds.com.

The Fund's total gross operating expenses are 2.14%. The Fund's total net operating expenses are 1.98%. Under the Investment Advisory Agreement, the Investment Adviser has agreed to reduce its fees and/or make expense reimbursements so that the Fund's total annual operating expenses (excluding independent trustees' compensation, brokerage and commission expenses, short sale expenses, litigation costs and any extraordinary and non-recurring expenses) are limited to 1.98% of the Fund's average daily net assets up to $200 million, 1.93% of such assets from $200 million to $500 million, 1.88% of such assets from $500 million to $1 billion, and 1.83% of such assets in excess of $1 billion. The Investment Adviser has also agreed to donate a portion of its management fees collected, amounting to 0.20% of the Fund's average daily net assets, to various non-profit organizations as elected by Fund shareholders. The current expense waiver is in effect until 8/31/18.

Growth of a Hypothetical $10,000 Investment

October 29, 2007 through June 30, 2017

Chart represents the growth of a hypothetical $10,000 investment from Firsthand Alternative Energy Fund inception date until the end of the quarter indicated. Firsthand Alternative Energy Fund performance assumes reinvestment of all dividends and includes all Fund expenses but does not reflect the impact of taxes.

Q1 '17 Contributors to Performance

Photonics company Intevac (IVAC) was the largest contributor to Fund performance for Q1. The company reported solid growth in its thin-film equipment orders, with backlog growth of 139%. Intevac also reported modest growth in its core hard drive business, and its stock finished the quarter up 46.20%.

Electric car company Tesla (TSLA) was another strong performer, reporting a revenue beat for Q4—jumping 88% year-over-year to $2 billion. Although the company delivered fewer cars than the previous quarter, the total was still up 27% from the year-ago quarter. Tesla also reported record orders for the quarter and its stock finished Q1 up 30.24%. We received shares of Tesla in November 2016 when it acquired residential solar installer SolarCity, and we sold roughly half of those shares during Q1.

Vestas Wind Systems (VWSYF) rounds out the top three performers for the Fund. The turbine maker reported fourth quarter earnings that were in line with expectations, although it warned that total 2017 revenue could be lower than last year. Vestas initially signaled a potential slowdown after the election of Donald Trump, given his support of fossil fuels but the company's stock finished the quarter up 25.57%.

Q1 '17 Detractors from Performance

Solar panel maker First Solar (FSLR) was the biggest detractor from Fund performance during the quarter, with shares down 15.55%. The company reported Q4 results that, while significantly outperforming expectations, represented a steep decline from the year-ago quarter. First Solar reported lower sales in the fourth quarter combined with hefty restructuring costs. The company is reconfiguring its product mix, with an emphasis on a new, larger solar module, which it hopes to begin selling by the end of 2017.

Another detractor was analog circuit designer Power Integrations (POWI). The company reported better-than-anticipated earnings and 16% year-over-year growth, but issued guidance for flat Q1 revenue and its shares finished the first quarter down 3.10%.

Smart metering company Itron (ITRI) was also a drag on Fund performance, with Q4 earnings that outperformed the year-ago quarter, while year-over-year revenue remained flat. The company announced a $50 million share buyback late in February, while continuing its restructuring efforts and shares were down 3.42% in Q1.

Firsthand Alternative Energy Fund is subject to greater risk than more diversified funds because of its investments in fewer securities and because of its concentration of investments in the alternative energy and energy technology sectors. Specific risks associated with these investments could cause the Fund's share price to fluctuate dramatically. The Fund's investments in small-cap companies present greater risk than investments in larger companies. The Fund invests in several industries within the alternative energy and energy technology sectors and the relative weightings of these industries in the Fund's portfolio may change at any time. Equity investing involves risks, including the potential loss of the principal amount invested.

The Standard & Poor's 500 Index (S&P 500) represents an unmanaged, broad-based basket of stocks and is typically used as a benchmark for overall market performance. The WilderHill Clean Energy Index is a market-weighted index of 53 companies in the cleaner fuel, energy conversion, energy storage, greener utilities, power delivery and conservation, and renewable energy harvesting sectors. The indices' performance figures assume the reinvestment of all dividends (except where noted), but do not reflect the impact of taxes. Additionally, because an investor cannot invest in an index directly, indices' performance figures do not reflect the expenses associated with the management of an actual mutual fund portfolio.

As of 3/31/17: FSLR (3.58% of ALTEX), ITRI (6.37% of ALTEX), IVAC (3.72% of ALTEX), POWI (7.19% of ALTEX), TSLA (3.23% of TEFQX, 3.15% of ALTEX), ULVAC (2.37% of ALTEX), VWSYF (4.64% of ALTEX). A complete list of portfolio holdings for Firsthand Funds is available on www.firsthandfunds.com and is updated 45 days after the end of the every calendar quarter. The portfolio holdings discussed are subject to change.

The information provided should not be considered a recommendation to purchase or sell a particular security and there is no assurance that, as of the date of publication, the securities purchased remain in a Fund's portfolio or that securities sold have not been repurchased. Also, you should note that the securities discussed, even if they have been purchased by a Fund, do not represent a Fund's entire portfolio and, in the aggregate, may represent only a small percentage of that Fund's holdings. There can be no assurance that any Firsthand Funds will buy, sell, or hold any particular security after the date referred to in the discussion.