Firsthand Alternative Energy Fund

Firsthand Alternative Energy Fund

Average Annual Total Returns vs. Indices
As of September 30, 2018
Period Firsthand Alternative
Energy Fund
WilderHill Clean Energy Index S&P 500 Index
Since inception (10/29/07) -4.06% -13.31% 8.29%
10-Year -2.70% -9.53% 11.96%
5-Year 1.60% -4.13% 13.95%
3-Year 6.78% 7.55% 17.32%
1-Year -1.46% 7.28% 17.90%
Q3 '18 (not annualized) -1.09% -0.23% 7.71%

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 8/31/19.

Growth of a Hypothetical $10,000 Investment

October 29, 2007 through September 30, 2018

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.

Q2 '18 Contributors to Performance

Tesla (TSLA) was the top contributor to Fund performance for the second quarter, with shares of the electric car maker up 28.87%. Although the company reported losses of $3.35 per share on revenue of $3.4 billion for the first quarter, those results beat analyst expectations. At the end of June, Tesla, which has been plagued by production problems, hit its goal of producing 5,000 Model 3s per week. The Fund exited its position in Tesla during the quarter.

Power Integrations (POWI) reported earnings and revenue beats for Q1 and issued Q2 guidance roughly in line with analyst expectations. The chip maker has benefitted from steady growth in renewable energy applications as well as demand for power conversion chips for internet-of-things ("IoT") devices, USB power outlets, and smart meters. Shares of Power Integrations finished Q2 up 7.11%.

Electronics giant Koninklijke Philips (PHG) was another strong contributor to Fund performance during the quarter. Despite weak Q1 earnings resulting from its home lighting division, shares of the company finished the second quarter up 12.93%.

Q2 '18 Detractors from Performance

First Solar (FSLR) was the Fund's largest detractor, with shares declining 25.81% in Q2. The panel maker reported significant revenue and earnings beats for Q1 and is planning a massive production capacity expansion over the next two years (from 2 gigawatts (GW) in 2017 to 7.6GW in 2020). Additionally, the company's thin-film modules are exempt from the new 30% solar panel import tariff. However, First Solar, like other panel makers, felt the effects of China's recent decision to cut solar incentives for the rest of the year.

Itron (ITRI) was another detractor from Fund performance with shares ending the quarter down 16.07%. The smart metering company reported Q1 earnings that were in line with expectations but down 77% year over year.

Photovoltaic inverter company Solar Edge (SEDG) finished Q2 down 9.03%. The company reported Q1 results in line with Street expectations and issued slighter better-than-expected guidance, which was enough to help shares hit a 52-week high during the quarter. However, Solar Edge has suffered along with the entire solar industry in the wake of recently-announced U.S. tariffs on imported solar panels in addition to reductions in Chinese solar incentives.

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 6/30/18: FSLR (6.66% of ALTEX), ITRI (6.04% of ALTEX), PHG (4.41% of ALTEX), POWI (7.65% of ALTEX), SEDG (9.51% of ALTEX). As of 6/30/18, TSLA was not held in any Firsthand Funds portfolio. 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.