Firsthand Technology Opportunities Fund

Firsthand Technology Opportunities Fund

Average Annual Total Returns vs. Indices
As of December 31, 2017
Period Firsthand Technology
Opportunities Fund
NASDAQ Composite Index S&P 500 Index
Since inception (9/30/99) 2.50% 6.20% 6.12%
10-Year 12.81% 11.35% 8.48%
5-Year 19.87% 19.50% 15.77%
3-Year 19.78% 14.83% 11.40%
1-Year 55.45% 29.73% 21.82%
Q4 '17 (not annualized) 9.91% 6.57% 6.64%
Monthly Performance Update
As of January 31, 2018
Period Firsthand Technology
Opportunities Fund
Since inception (9/30/99) 3.02%
10-Year 15.64%
5-Year 21.65%
3-Year 23.40%
1-Year 60.76%
1-Month 10.02%

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 1.86%. The Fund's total net operating expenses are 1.85%. Under the Investment Advisory Agreements, the Investment Adviser has agreed to reduce its fees and/or make expense reimbursements so that the Fund's total operating expenses (excluding independent trustees' compensation, brokerage and commission expenses, litigation costs and any extraordinary and non-recurring expenses) are limited to 1.85% of the Fund's average daily net assets up to $200 million, 1.80% of such assets from $200 million to $500 million, 1.75% of such assets from $500 million to $1 billion, and 1.70% of such assets in excess of $1 billion. The current expense waiver is in effect until 8/31/18.

Growth of a Hypothetical $10,000 Investment

September 30, 1999 through December 31, 2017

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

Q4 '17 Contributors to Performance

Nutanix (NTNX) was the Fund's top contributor in Q4 thanks to fiscal first-quarter financials that beat Wall Street expectations. Revenue for the hyperconverged infrastructure provider was up 46% year-over-year. Nutanix added several major customers during its fiscal Q1, including ConocoPhillips (COP), Scholastic (SCHL), and Toyota Motor North America (TM). Shares of Nutanix finished Q4 up 57.57%.

Arista Networks (ANET) trounced analyst expectations, with earnings and revenues up 94.1% and 50.8% year-over-year, respectively, in Q3. The network switching provider is seeing strong demand for its 100-gigabit routing/switching products as it continues to take market share from Cisco (CSCO). Arista shares gained 24.24% during the fourth quarter.

Tencent Holdings (TCEHY) also soundly beat Wall Street expectations for Q3 with profits up 69% year-over-year. The company's gaming business was largely responsible for the growth--Honour of Kings was one of the top-grossing mobile apps in 2017. Additionally, the company's WeChat and QQ messaging apps combined to reach 980 million monthly users. Tencent shares finished Q4 up 20.75%.

Online giant Amazon (AMZN) was also a top contributor to the Fund in Q4, with shares finishing up 21.65%. The company acquired Whole Foods in late August and its $1.3 billion in revenue from that segment in Q3 helped Amazon to a significant revenue beat in Q3.

Q4 '17 Detractors from Performance

Streaming music company Pandora (P) was the largest detractor from Fund performance in Q4. Although subscription revenue grew 50% year-over-year, the company saw its shares slide on a Q3 earnings and revenue miss. Shares of Pandora fell 37.40% in Q4.

Cloud communications platform Twilio (TWLO) was another drag on Fund performance during the quarter, with shares down 20.94%. The company reported Q3 financials that exceeded expectations but earnings were down significantly year-over-year.

Tesla Motors (TSLA) was another disappointing performer in Q4, as the electric car maker struggled with production bottlenecks on the Model 3 sedan. The company also reported larger-than-expected losses for Q3. During the fourth quarter, Tesla terminated several hundred employees and is facing a United Auto Workers complaint as a result. Shares of Tesla finished the quarter down 8.72%.

Chinese online giant Baidu (BIDU) was also a detractor from Fund performance, finishing the quarter down 5.44%. The company reported a Q3 revenue miss and lowered Q4 guidance.

Firsthand Technology Opportunities 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 certain industries in the technology sector. Specific risks associated with investments in the technology industries (as described in the Fund's Prospectus) 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 technology sector 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 NASDAQ Composite Index (NASDAQ) and the Standard & Poor's 500 Index (S&P 500) each represent an unmanaged, broad-based basket of stocks and are typically used as benchmarks for overall market performance. 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 12/31/17: AMZN (4.70% of TEFQX), ANET (13.25% of TEFQX), BIDU (2.82% of TEFQX), NTNX (7.09% of TEFQX), P (0.77% of TEFQX), TCEHY (10.23% of TEFQX), TSLA (2.50% of TEFQX), TWLO (1.71% of TEFQX). As of 12/31/17, CSCO, COP, SCHL, and TM were 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.