InSync Partners Offshore Fund Ltd.’s portfolio manager and cofounder, Peter Wolff, remains optimistic for the prospects of technology stocks, despite what he admits has been “a pretty tough year.” This is not hyperbole – the $10 million hedge fund is down 38.07% this year. The 37 funds in the Hedgefund.net index are up 0.73% this year.

Mr. Wolff, who manages the fund with Len Goldberg, said he is not looking to change his style or investing approach: “We tend to make our [investment] decisions and stick with them.” He argues that all technology investors were surprised by the global weakness in technology companies’ earnings releases. As evidence, he pointed to the spate of large companies that reported earnings short of Wall Street expectations starting in the third quarter.

“Technology is so big in terms of its importance to the global economy that we now have defined [and extended] cycles in it, just like autos or any other commodity,” said Mr. Wolff. “So all the momentum players ran for the door at once, which depressed prices to record lows.”

He said that what used to be “a periodic bump” in technology company earnings or revenue growth now can amount to multi-year droughts, as the fast pace of technological development makes high-fliers into “commodity plays.”

Also hurting technology stock hedge funds was the restructuring under way at tech-stock-oriented Andor Fund, where the fund’s co-founder, Chris James, announced his intention to start his own fund. Throughout July, Andor sold billions of dollars worth of positions to meet nearly $2 billion in investor redemptions.

Declining to identify his holdings, Mr. Wolff, who spent nearly 25 years as a tech analyst in Asia prior to launching the fund in 2000, said he is looking for several kinds of companies in which to invest. The first are growth stocks with market capitalizations under $1 billion; the second are companies that have a forward-looking technology that can’t be easily replicated.

“We are looking at a company that can refine energy usage, we like companies that can solve problems, such as the lack of gigabyte storage for personal computers,” he said.

Despite the rough year – which started out with a 16.72 return in January, on top of last year’s 14.71 performance – Mr. Wolff said his investors are still with the fund “since they are all tech-oriented people and understand our philosophy.”