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5 Strong Buy Technology Mutual Funds Set to Outperform

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Technology is clearly a long term growth prospect for investors willing to remain invested and should continue to outperform the market over time. Many have viewed the sector with skepticism since the tech bubble burst more than a decade ago, but times have clearly changed for the better. Valuations are now based on stronger fundamentals and careful selection of investments has yielded good long term returns for many funds. Technology mutual funds greatly reduce the volatility inherent in this sector by carefully selecting securities to create widely diversified portfolios.

Below we will share with you 5 top rated technology mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all technology funds, investors can click here to see the complete list of funds.

T. Rowe Price Global Technology (PRGTX - Free Report) seeks capital appreciation over the long run. It invests a lion’s share of its assets in companies that uses technological development and advancements to earn revenues. It invests in a minimum of five countries. It also invests 25% of its assets outside domestic boundary. Factors such as growth prospects and valuations of stocks are considered to select investments. The technology mutual fund has a one year annualized return of 40%.

This fund has an expense ratio of 0.95% as compared to category average of 1.50%.

Fidelity Select Electronics Portfolio (FSELX - Free Report) invests majority of its assets in companies whose primary operations are related to the electronics sector. Investments are made in both domestic and foreign companies. The fund uses fundamental analysis to select companies for investment purposes. The fund seeks capital growth. This non-diversified technology mutual fund has a one year annualized return of 36.1%.

Stephen Barwikowski is the fund manager and has managed the fund since 2009.

USAA Science & Technology (USSCX - Free Report) seeks long-term capital growth. It invests a large portion of its assets in companies which are expected to gain from science and technology advancement. It invests a maximum of half of its assets in foreign companies. The technology mutual fund has a one year annualized return of 26.9%.

As of April 2014, this fund held 153 issues with 5.63% invested in Apple Inc.

Buffalo Discovery (BUFTX - Free Report) invests in equities of companies that use technological development and advancements to enhance its value. Although it invests in domestic firms, it may also invest a maximum of 20% of its assets in non U.S. companies through ADRs and other securities that are traded in the U.S. The technology mutual fund has a one year annualized return of 17.7%.

This fund has an expense ratio of 1.01% as compared to category average of 1.33%.

Fidelity Select Communications Equip Portfolio (FSDCX - Free Report) seeks long-term capital growth. It invests a lion’s share of its assets in companies involved in the production and development of communications equipments. Factors such as financial strength and economic condition are taken into consideration to invest in companies all over the globe. This non-diversified technology mutual fund has a one year annualized return of 16.3%.

Ali Khan is the fund manager and has managed the fund since 2012.

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

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank in our Mutual Fund Center.



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