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5 Best Technology Mutual Funds to Buy Amid Easing Inflation
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The U.S stock market has witnessed a massacre from late 2021 mostly on account of four-decade-high inflation. The Consumer Price Index (CPI) for the month of December dived to 6.5% after record highs in September and August 2022.
Retail sales fell 1.1% for the month of December, suggesting that the Federal Reserve’s aggressive monetary policy tightening to tame inflation began to bring results. Due to the Fed’s policy of increasing interest rates, the technology sector was the most affected. The tech-laden Nasdaq had posted a negative return of 17.98% in the past year.
Investors began to expect that the Fed is preparing to slow down the pace of its inflation-fighting rate hike after considering the recent developments. Technology stocks have historically underperformed as compared to the other sectors during the rising inflation period. Interest rates have an inverse relationship with the valuations of technology stocks. Rising interest rates make finance operations more expensive for new-age technology companies that are in cash-burning stage for achieving higher growth and market share.
Hence, with dipping inflation, and a stable interest rate, it is more likely that the technology industry as a whole will reward investors exponentially. Also, the reopening of China after a temporary shutdown due to a surge in COVID-19 cases is likely to smoothen supply-chain disruptions.
Thus, from an investment standpoint, we have highlighted five technology Mutual Funds that are expected to give a positive return amid easing inflation. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
These funds, by the way, have given impressive 3-year and 5-year returns as well, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or Rank 2 (Buy), offer a minimum initial investment within $5,000, and carry a low expense ratio compared to the category average.
Fidelity Select Semiconductors Portfolio (FSELX - Free Report) invests most of its net assets in common stocks of domestic and foreign companies that are engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX advisors choose to invest in stocks based on fundamental analysis factors such as the issuer's financial condition, industry position, as well as market and economic conditions.
Adam Benjamin has been the lead manager of FSELX since Mar 16, 2020, and most of the fund’s holdings were in companies like Nvidia Corporation (20.48%), NXP Semiconductors (10.11%), and Marvell Technology (9.13%) as of Aug 31, 2022.
FSELX’s 3-year and 5-year returns are 14.1% and 16.6%, respectively. The annual expense ratio of 0.68% is lower than the category average of 1.05%. FSELX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Columbia Seligman Technology and Information Fund (SCMIX - Free Report) invests most of its net assets in equity securities of technology and information companies with operations in the information technology and communications services sectors, applying a global industry classification standard amended from time to time, to determine industry/sector classifications, as well as other related industries. SCMIX advisors also invest a small portion of their investment in foreign companies.
Paul H. Wick has been the lead manager of SCMIX since Jan 1, 1990, and most of the fund’s holdings were in companies like Apple Incorporated (5.94%), Lam Research (5.76%), and Broadcom (3.85%) as of Aug 31, 2022.
SCMIX’s 3-year and 5-year returns are 11.6% and 14.7%, respectively. The annual expense ratio is 0.89% compared to the category average of 1.05%. SCMIX has a Zacks Mutual Fund Rank #2.
Black Oak Emerging Technology Fund (BOGSX - Free Report) invests most of its net assets in equity securities of emerging technology companies, as determined by the Advisor. BOGSX advisors choose to invest in stocks that are well-positioned to become market leaders.
Robert D. Stimpson has been the lead manager of BOGSX since Apr 7, 2006, and most of the fund’s holdings were in companies like Apple Incorporated (5.73%), Cirrus Logic Incorporated (5.02%) and Solaredge Technologies Incorporated (4.79%) as of Jul 31, 2022.
BOGSX’s 3-year and 5-year returns are 10.2% and 11.9%, respectively. The annual expense ratio is 1.0% compared to the category average of 1.05%. BOGSX has a Zacks Mutual Fund Rank #1.
Software and IT Services Portfolio (FSCSX - Free Report) invests most of its net assets in common stocks of domestic and foreign companies that are engaged in research, design, production, or distribution of products or processes that relate to software or information-based services. FSCSX advisors choose to invest in stocks based on fundamental analysis factors such as the issuer's financial condition, industry position, as well as market and economic conditions.
David C. Hoeft has been the lead manager of FSCSX since Jan 1, 2002, and most of the fund’s holdings were in companies like Microsoft Corporation (24.74%), Visa Incorporated (7.25%) and Mastercard Incorporated (6.4%) as of Aug 31, 2022.
FSCSX’s 3-year and 5-year returns are 6.8% and 12.0%, respectively. The annual expense ratio is 0.68% compared to the category average of 1.05%. FSCSX has a Zacks Mutual Fund Rank #1.
Columbia Global Technology Growth Fund (CMTFX - Free Report) invests most of its assets, along with borrowings, if any, in common stocks, preferred stocks, and securities convertible into common or preferred stocks of technology companies that may benefit from technological improvements, advancements or developments. CMTFX invests a small portion of its investment in companies with principal business activities in technology and related groups of industries.
Rahul Narang has been the lead manager of CMTFX since Jul 17, 2012, and most of the fund’s holdings were in companies like Apple Incorporated (10.98%), Microsoft Corporation (9.95%), and Alphabet Incorporated (5.5%) as of Aug 31, 2022.
CMTFX’s 3-year and 5-year returns are 6.5% and 11.2%, respectively. The annual expense ratio is 0.92% compared to the category average of 1.05%. CMTFX has a Zacks Mutual Fund Rank #2.
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5 Best Technology Mutual Funds to Buy Amid Easing Inflation
The U.S stock market has witnessed a massacre from late 2021 mostly on account of four-decade-high inflation. The Consumer Price Index (CPI) for the month of December dived to 6.5% after record highs in September and August 2022.
Retail sales fell 1.1% for the month of December, suggesting that the Federal Reserve’s aggressive monetary policy tightening to tame inflation began to bring results. Due to the Fed’s policy of increasing interest rates, the technology sector was the most affected. The tech-laden Nasdaq had posted a negative return of 17.98% in the past year.
Investors began to expect that the Fed is preparing to slow down the pace of its inflation-fighting rate hike after considering the recent developments. Technology stocks have historically underperformed as compared to the other sectors during the rising inflation period. Interest rates have an inverse relationship with the valuations of technology stocks. Rising interest rates make finance operations more expensive for new-age technology companies that are in cash-burning stage for achieving higher growth and market share.
Hence, with dipping inflation, and a stable interest rate, it is more likely that the technology industry as a whole will reward investors exponentially. Also, the reopening of China after a temporary shutdown due to a surge in COVID-19 cases is likely to smoothen supply-chain disruptions.
Thus, from an investment standpoint, we have highlighted five technology Mutual Funds that are expected to give a positive return amid easing inflation. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
These funds, by the way, have given impressive 3-year and 5-year returns as well, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or Rank 2 (Buy), offer a minimum initial investment within $5,000, and carry a low expense ratio compared to the category average.
Fidelity Select Semiconductors Portfolio (FSELX - Free Report) invests most of its net assets in common stocks of domestic and foreign companies that are engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX advisors choose to invest in stocks based on fundamental analysis factors such as the issuer's financial condition, industry position, as well as market and economic conditions.
Adam Benjamin has been the lead manager of FSELX since Mar 16, 2020, and most of the fund’s holdings were in companies like Nvidia Corporation (20.48%), NXP Semiconductors (10.11%), and Marvell Technology (9.13%) as of Aug 31, 2022.
FSELX’s 3-year and 5-year returns are 14.1% and 16.6%, respectively. The annual expense ratio of 0.68% is lower than the category average of 1.05%. FSELX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Columbia Seligman Technology and Information Fund (SCMIX - Free Report) invests most of its net assets in equity securities of technology and information companies with operations in the information technology and communications services sectors, applying a global industry classification standard amended from time to time, to determine industry/sector classifications, as well as other related industries. SCMIX advisors also invest a small portion of their investment in foreign companies.
Paul H. Wick has been the lead manager of SCMIX since Jan 1, 1990, and most of the fund’s holdings were in companies like Apple Incorporated (5.94%), Lam Research (5.76%), and Broadcom (3.85%) as of Aug 31, 2022.
SCMIX’s 3-year and 5-year returns are 11.6% and 14.7%, respectively. The annual expense ratio is 0.89% compared to the category average of 1.05%. SCMIX has a Zacks Mutual Fund Rank #2.
Black Oak Emerging Technology Fund (BOGSX - Free Report) invests most of its net assets in equity securities of emerging technology companies, as determined by the Advisor. BOGSX advisors choose to invest in stocks that are well-positioned to become market leaders.
Robert D. Stimpson has been the lead manager of BOGSX since Apr 7, 2006, and most of the fund’s holdings were in companies like Apple Incorporated (5.73%), Cirrus Logic Incorporated (5.02%) and Solaredge Technologies Incorporated (4.79%) as of Jul 31, 2022.
BOGSX’s 3-year and 5-year returns are 10.2% and 11.9%, respectively. The annual expense ratio is 1.0% compared to the category average of 1.05%. BOGSX has a Zacks Mutual Fund Rank #1.
Software and IT Services Portfolio (FSCSX - Free Report) invests most of its net assets in common stocks of domestic and foreign companies that are engaged in research, design, production, or distribution of products or processes that relate to software or information-based services. FSCSX advisors choose to invest in stocks based on fundamental analysis factors such as the issuer's financial condition, industry position, as well as market and economic conditions.
David C. Hoeft has been the lead manager of FSCSX since Jan 1, 2002, and most of the fund’s holdings were in companies like Microsoft Corporation (24.74%), Visa Incorporated (7.25%) and Mastercard Incorporated (6.4%) as of Aug 31, 2022.
FSCSX’s 3-year and 5-year returns are 6.8% and 12.0%, respectively. The annual expense ratio is 0.68% compared to the category average of 1.05%. FSCSX has a Zacks Mutual Fund Rank #1.
Columbia Global Technology Growth Fund (CMTFX - Free Report) invests most of its assets, along with borrowings, if any, in common stocks, preferred stocks, and securities convertible into common or preferred stocks of technology companies that may benefit from technological improvements, advancements or developments. CMTFX invests a small portion of its investment in companies with principal business activities in technology and related groups of industries.
Rahul Narang has been the lead manager of CMTFX since Jul 17, 2012, and most of the fund’s holdings were in companies like Apple Incorporated (10.98%), Microsoft Corporation (9.95%), and Alphabet Incorporated (5.5%) as of Aug 31, 2022.
CMTFX’s 3-year and 5-year returns are 6.5% and 11.2%, respectively. The annual expense ratio is 0.92% compared to the category average of 1.05%. CMTFX has a Zacks Mutual Fund Rank #2.
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