Back to top

Image: Bigstock

3 Technology Mutual Funds for Scintillating Returns

Read MoreHide Full Article

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 others owing to innovation and greater demand. Improving industry fundamentals and emerging technologies — such as wearables, VR headsets, drones, virtual reality devices and AI — are the key catalysts for the sector.

Meanwhile, most mutual funds investing in securities from these sectors prefer a growth-oriented approach that includes focusing on companies with strong fundamentals and a relatively higher investment prospect. Moreover, technology now has broader coverage than just hardware and software companies. Social media and Internet companies are also part of the technology landscape today.

Below we share with you three top-ranked 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 funds.

BlackRock Technology Opportunities Fund Investor A Shares (BGSAX - Free Report) aims for long-term capital appreciation. The fund invests the majority of its assets in equity securities issued by domestic as well as foreign technology companies across all market capitalization ranges. Such companies are selected primarily for their rapid and sustainable growth potential from the development, advancement and use of technology. BGSAX has three-year annualized returns of 37.1%.

As of the end of January 2020, BGSAX held 143 issues with 3.7% of its assets invested in Apple Inc.

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 has three-year annualized returns of 31.1%.

Brian Lempel is the fund manager of FSPTX since 2020.

Fidelity Select Software & IT Services Portfolio (FSCSX - Free Report) aims for capital appreciation. The non-diversified fund invests the majority of its assets in common stocks of companies engaged in research, design, production, or distribution of products or processes that relate to software or information-based services. FSCSX has three-year annualized returns of 25.2%.

FSCSX has an expense ratio of 0.71% compared to the category average of 1.24%.

To view the Zacks Rank and past performance of all technology mutual funds, investors can click here to see the complete list of funds.

Want key mutual fund info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>