Risk lovers seeking healthy returns over a fairly long investment horizon may opt for technology mutual funds. It is believed that the technology sector is poised for a brighter earnings performance than the other sectors due to greater demand for technology and innovation. The sector is likely to experience more volatility than the others in the short term. However, the extent of volatility is expected to ease over a longer-time horizon.
Meanwhile, most of the mutual funds investing in securities from these sectors opt for a growth-oriented approach that includes focusing on companies with strong fundamentals and a relatively higher investment prospect. Moreover, technology has come to have a broader meaning than just hardware and software companies. Social media and "Internet" companies are now part of the technology landscape.
Below we share with you three top-rated technology mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of technology funds , their Zacks Rank and past performance.
Fidelity Select Technology PortfolioFSPTX seeks capital growth over the long run. FSPTX invests a large chunk of its assets in common stocks of companies primarily involved in production, development and sale of products used for technological advancement. The fund invests in both U.S. and non-U.S. companies. Factors including financial strength and economic condition are considered before investing in a company. Fidelity Select Technology Portfolio is non-diversified and has a three-year annualized return of 10.2%.
Charlie Chai is the fund manager of FSPTX since 2007.
Fidelity Select SemiconductorsFSELX invests the bulk of its assets in common stocks of companies involved in manufacture, design and sale of electronic equipment and components. FSELX seeks growth of capital. The fund invests in both U.S. companies and non-U.S. companies. The fund analyses the industry position and financial condition of companies to select for investments. This non-diversified fund has a three-year annualized return of 23.6%.
FSELX has an expense ratio of 0.74% as compared to the category average of 1.45%.
Janus Global Technology AJATAX seeks capital appreciation for the long run. JATAX invests the majority of its assets in equity securities of those companies that are expected to gain from any improvement or advancement in technology. The fund invests in both domestic and foreign companies with stable growth potential. Janus Global Technology A has a three-year annualized return of 9.2%.
J. Slingerlend is one of the fund managers of JATAX since 2011.
To view the Zacks Rank and past performance of all technology mutual funds, investors can click here to see the complete list of funds .
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