Firsthand Alternative Energy Fund

Firsthand Alternative Energy Fund

Average Annual Total Returns vs. Indices
As of December 31, 2018
Period Firsthand Alternative
Energy Fund
WilderHill Clean Energy Index S&P 500 Index
Since inception (10/29/07) -5.23% -14.13% 6.70%
10-Year -0.35% -5.73% 13.10%
5-Year -3.25% -7.10% 8.48%
3-Year -2.01% -2.41% 9.24%
1-Year -18.57% -14.60% -4.39%
Q4 '18 (not annualized) -13.68% -13.27% -13.52%
Monthly Performance Update
As of February 28, 2019
Period Firsthand Alternative
Energy Fund
Since inception (10/29/07) -3.78%
10-Year 2.88%
5-Year -2.53%
3-Year 6.75%
1-Year -3.55%
1-Month 4.72%

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 2.15%. 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 December 31, 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.

Q4 '18 Contributors to Performance

Cree (CREE) was the top contributor to the Fund’s performance in the fourth quarter. The manufacturer of LEDs, lighting products, and silicon carbide semiconductors topped analysts’ expectations for its first fiscal quarter of 2019. Cree has been reducing its exposure to the lighting industry and focusing on higher-margin businesses such as power and radio frequency semiconductors.

Another top contributor to the Fund’s Q4 performance was Vestas Wind Systems (VWSYF). The wind turbine company’s stock leaped upward after the company’s announcement of its Q3 financial results. Although Vestas profits declined in Q3, the company reported a strong order book and indicated that turbine prices had begun to stabilize after period of decline. In December, the company announced an order for the largest wind farm in Russia.

Iberdrola (no U.S. symbol) posted strong revenue growth in the first nine months of 2018 and was among the top contributors to fund performance in Q4. The renewable power giant agreed in October to sell some of its UK renewable power generation assets to Drax Group Plc.

Q4 '18 Detractors from Performance

Itron (ITRI) was the largest detractor from the Fund’s performance during Q4. The manufacturer of power and water meters experienced revenue growth for the first nine months of 2018 but reported in November that supply chain problems would impact its revenue guidance for the full year 2018.

Another negative contributor to fund performance in Q4 was Aspen Aerogels (ASPN). The company’s stock declined sharply in Q4, particularly after the company announced in early November that Q3 revenues and earnings had declined on a year-over-year basis. The company also lowered its full-year 2018 revenue guidance during the quarter.

After reaching an all-time high in September 2018, the stock of U.K. biopharmaceutical company GW Pharmaceuticals plc (GWPH) dropped in Q4 and was one of the Fund’s largest negative performers during the quarter. After receiving U.S. Food and Drug Administration approval in June for its epilepsy drug Epidiolex, the company received a second dose of good news in September when the U.S. Drug Enforcement Administration classified Epidiolex as a Schedule V drug, which is the least restrictive prescribing category of controlled substances. However, GW Pharmaceuticals stock slid in Q4 along with the market and, more specifically, with other marijuana-related stocks.

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 12/31/18: CREE (7.71% of ALTEX), VWSYF (5.11% of ALTEX), Iberdrola(3.90% of ALTEX), ITRI (5.93% of ALTEX), ASPN (1.68% of ALTEX), GWPH (2.19% 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 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.