As the manic growth of tech stocks convulses bourses across the world, risk-takers are shuttling between the old and new economies like revolving doors, forcing Asian fund managers into "sector rotation".

Nasdaq's second largest one-day fall overnight and the simultaneous rise of the Dow show that many investors and even trustees are struggling between cashing out profits and pursuing growth stocks.

Sector rotation has been a hallmark of the global equity markets in the last quarter, confirming the assertion by Mark Konyn, head of Dresdner RCM Asia, that a sector approach is perhaps more of a consideration for managers than regional and individual country allocation.

As Konyn observes, the world markets' yo-yo performances led by Nasdaq's volatility in the past quarter have forced retirement fund trustees to refocus on risk management.

Konyn says some trustees have reaped profits. What they are worrying about now is where to keep them.

TMTs dominate

Despite calls from some Wall Street analysts that it's time to re-purchase old economy stocks such as those in the oil sector, Konyn believes the tech sector has just entered its second phase of growth.

Content providers (News Corp, TVB), computer parts manufacturers (TSMC, Hon Hai Precision Industry), digital gadget producers (Nokia, NTT DoCoMo) and software developers (Microsoft) are seen as the engines of growth in the new economy.

The fact that News Corp led an overnight fall on the Australian All Ords on the heels of Nasdaq's dive, and the uncertainty of how Microsoft will be penalized for breaching anti-trust laws, has not fazed Konynáor other analysts.

On the future of internet companies in Asia, a survey by Dresdner on 52 web consultants indicates large companies are going to increase advertising budgets in the next 12 months.

The four industries most likely to advertise on the net are financial services, telecommunications, information technology and consumer-related businesses.

While the advertising front may have remained intact, the impact of the Nasdaq falls will be chiefly felt by future dotcom startups raising capital from the market as institutional investors are unlikely to continue to provide funds to obscure companies with speculative ventures.

For prudent financiers, Konyn believes realistic earnings expectations and solid B2B business models should be the criteria for future funding. And value-investing coming back as the mainstream investment style, he says, is a long way off.