Internet Funds Are On A Strong Run Has Sector Hit Bottom? Munder likes Doubleclick as well as TMP Worldwide; Amerindo favors Expedia.(MUTUAL FUNDS)

Byline: PAUL KATZEFF

The Internet sector has been on a tear since the market's post-terrorist reopening.

The market bottomed on Sept. 21. The S&P 500 index, for instance, hit 965.79. After that, the 23 surviving Internet funds gained an average of more than 39% through Dec. 27. The S&P 500 returned 20%.

Before that, Net funds had fallen more than twice as fast as the market. The S&P 500 lost 26% for the year through Sept. 21. Net funds plunged 57%.

Net fund managers think their sector has bottomed.

"We don't think the upturn since September is a dead-cat bounce," said Brian Salerno, co-manager of $1.5 billion Munder NetNet Fund. "We think it will continue, even if not at the same pace as recently."

As an industry sector, the Internet is in the first of three stages, Salerno says. The first stage is marked by a shift in investor attitude.