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4 Mutual Funds to Gain the Most from The AI Revolution
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Advancement in technology has boosted artificial intelligence (AI) in the past decade. However, with the pandemic, people are depending on technology more to work and shop from home. Even before the pandemic, AI had moved beyond fiction movies and has played a significant role in everyday life. From banking and financial services, telecommunication, transportation and logistics, media, retail, manufacturing, to healthcare and household applications, the growth in AI has been diverse and will continue to grow in the future. According to analytics insight’s Global Artificial Intelligence Market 2020-2025 report, the global AI market is expected to grow to $252 billion by 2023 from $29 billion in 2019, at a CAGR of 42.5%.
AI for Daily Use
From communication to shopping, household help to workspace management, AI can now streamline and improve several day-to-day operations, making them faster and hassle-free. Along with helping businesses operate during the pandemic through cloud computing, analytical services, online payment, communication, etc., AI is now helping mothers teach their kids at home, control the household environment by cleaning and much more. Robots like iRobot’s Roomba 980 model is powered by AI and has advanced decision-making capabilities. This robot can scan the entire room and identify obstacles and also create efficient routes and methods. Hence, the family can now spend more time in work and play rather than being worried about the cleanliness of the house.
Even if one cannot afford these small robots, AI techs like digital assistants have now entered every other household. These AI-based digital assistants offer home automation, allowing one to control a house’s thermostat, lights and other devices along with basic features like message dictation, Internet searches, alarms, scheduling, reminders, calculation and music playbacks. AI is also being constantly used in the development of coronavirus vaccine as it helps in reading the genetic structure of the virus faster and help scientists to design a cure quicker.
With constant funding in both big-tech AI companies and startups, this technology has a brighter future than anticipated. In the first quarter of this year, nearly 500 AI startups across 42 countries have raised more than $8.4 billion, per a CB Insights report.
Our Top 4 Fund Choices
Given the strong prospects of AI, we have shortlisted four mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging year-to-date (YTD) returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform their peers in the future.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Janus Henderson Global Technology and Innovation Fund Class T (JAGTX - Free Report) aims for long-term capital growth. The fund invests majority of its assets in securities of companies that the fund managers believe will significantly benefit from advances in technology. JAGTX has returned 24.6% and 25.3% in the past three and five years, respectively.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
JAGTX has an annual expense ratio of 0.93%, which is below the category average of 1.25%. The fund has a minimum initial investment of $2,500. Some of the fund’s top AI stock holdings are Microsoft, Apple and Amazon.
Fidelity Select Technology Portfolio (FSPTX - Free Report) fund aims for capital appreciation. The fund invests primarily in equity securities, especially common stocks of companies that are engaged in offering, using, or developing products, processes, or services that will provide or will benefit significantly from technological advances and improvements. FSPTX is a non-diversified fund that has returned 22.9% and 25.6% in the past three and five years, respectively.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSPTX has an annual expense ratio of 0.71%, which is below the category average of 1.25%. The fund has no minimum initial investment. Some of the fund’s top AI stock holdings are Nvidia, Microsoft and Apple.
T. Rowe Price Global Technology Fund (PRGTX - Free Report) aims for long-term capital growth. The fund invests most of its assets in the common stocks of companies that its managers expect will generate the majority of their revenues from the development, advancement, and use of technology. PRGTX is a non-diversified fund and has returned 20.5% and 23.1% in the past three and five years, respectively.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PRGTX has an annual expense ratio of 0.88%, which is below the category average of 1.25%. The fund has a minimum initial investment of $2,500. Some of the fund’s top AI stock holdings are Google, Micron Technology and Intuit.
Fidelity Select Semiconductors Portfolio (FSELX - Free Report) fund aims for capital appreciation. The non-diversified fund invests the majority of its assets in securities of companies principally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX has returned 20.5% and 25.4% in the past three and five years, respectively.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSELX has an annual expense ratio of 0.72%, which is below the category average of 1.25%. The fund has no minimum initial investment. Some of the fund’s top AI stock holdings are Nvidia, Intel and Micron Technology.
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4 Mutual Funds to Gain the Most from The AI Revolution
Advancement in technology has boosted artificial intelligence (AI) in the past decade. However, with the pandemic, people are depending on technology more to work and shop from home. Even before the pandemic, AI had moved beyond fiction movies and has played a significant role in everyday life. From banking and financial services, telecommunication, transportation and logistics, media, retail, manufacturing, to healthcare and household applications, the growth in AI has been diverse and will continue to grow in the future. According to analytics insight’s Global Artificial Intelligence Market 2020-2025 report, the global AI market is expected to grow to $252 billion by 2023 from $29 billion in 2019, at a CAGR of 42.5%.
AI for Daily Use
From communication to shopping, household help to workspace management, AI can now streamline and improve several day-to-day operations, making them faster and hassle-free. Along with helping businesses operate during the pandemic through cloud computing, analytical services, online payment, communication, etc., AI is now helping mothers teach their kids at home, control the household environment by cleaning and much more. Robots like iRobot’s Roomba 980 model is powered by AI and has advanced decision-making capabilities. This robot can scan the entire room and identify obstacles and also create efficient routes and methods. Hence, the family can now spend more time in work and play rather than being worried about the cleanliness of the house.
Even if one cannot afford these small robots, AI techs like digital assistants have now entered every other household. These AI-based digital assistants offer home automation, allowing one to control a house’s thermostat, lights and other devices along with basic features like message dictation, Internet searches, alarms, scheduling, reminders, calculation and music playbacks. AI is also being constantly used in the development of coronavirus vaccine as it helps in reading the genetic structure of the virus faster and help scientists to design a cure quicker.
With constant funding in both big-tech AI companies and startups, this technology has a brighter future than anticipated. In the first quarter of this year, nearly 500 AI startups across 42 countries have raised more than $8.4 billion, per a CB Insights report.
Our Top 4 Fund Choices
Given the strong prospects of AI, we have shortlisted four mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging year-to-date (YTD) returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform their peers in the future.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Janus Henderson Global Technology and Innovation Fund Class T (JAGTX - Free Report) aims for long-term capital growth. The fund invests majority of its assets in securities of companies that the fund managers believe will significantly benefit from advances in technology. JAGTX has returned 24.6% and 25.3% in the past three and five years, respectively.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
JAGTX has an annual expense ratio of 0.93%, which is below the category average of 1.25%. The fund has a minimum initial investment of $2,500. Some of the fund’s top AI stock holdings are Microsoft, Apple and Amazon.
Fidelity Select Technology Portfolio (FSPTX - Free Report) fund aims for capital appreciation. The fund invests primarily in equity securities, especially common stocks of companies that are engaged in offering, using, or developing products, processes, or services that will provide or will benefit significantly from technological advances and improvements. FSPTX is a non-diversified fund that has returned 22.9% and 25.6% in the past three and five years, respectively.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSPTX has an annual expense ratio of 0.71%, which is below the category average of 1.25%. The fund has no minimum initial investment. Some of the fund’s top AI stock holdings are Nvidia, Microsoft and Apple.
T. Rowe Price Global Technology Fund (PRGTX - Free Report) aims for long-term capital growth. The fund invests most of its assets in the common stocks of companies that its managers expect will generate the majority of their revenues from the development, advancement, and use of technology. PRGTX is a non-diversified fund and has returned 20.5% and 23.1% in the past three and five years, respectively.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PRGTX has an annual expense ratio of 0.88%, which is below the category average of 1.25%. The fund has a minimum initial investment of $2,500. Some of the fund’s top AI stock holdings are Google, Micron Technology and Intuit.
Fidelity Select Semiconductors Portfolio (FSELX - Free Report) fund aims for capital appreciation. The non-diversified fund invests the majority of its assets in securities of companies principally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX has returned 20.5% and 25.4% in the past three and five years, respectively.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSELX has an annual expense ratio of 0.72%, which is below the category average of 1.25%. The fund has no minimum initial investment. Some of the fund’s top AI stock holdings are Nvidia, Intel and Micron Technology.
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