More often than not the technology sector is likely to report above par earnings than other sectors as the demand for technology and innovation remains high. However, technology stocks are considered to be more volatile than other sector specific stocks in the short run. In order to minimize this short term volatility almost all tech funds adopt a growth management style with a focus on strong fundamentals and a relatively higher investment horizon. Investors having an above par appetite for risk and fairly longer investment horizon should park their savings in these funds.
Below we will share with you 3 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.
Fidelity Advisor Electronics A (FELAX - Free Report) invests heavily in companies involved in manufacturing, designing and distribution of electronic components. The fund invests in firms through out the world. Factors such as financial strength and economic conditions are considered to invest in a company. The non-diversified technology mutual fund has a three year annualized return of 20.7%.
Stephen Barwikowski is the fund manager and has managed the fund since 2009.
Putnam Global Technology A (PGTAX - Free Report) seeks growth of capital. It invests in both growth and value stocks of mid to large-cap companies located across the world. Investments are made in companies that have the potential to develop advance technologies and products for consumers, firms or government bodies. It may also invest in derivatives. The non-diversified technology mutual fund has a three year annualized return of 16.6%.
As of September 2014, this fund held 77 issues with 18.83% invested in Apple Inc.
USAA Science & Technology Adviser (USTCX - Free Report) invests a large portion of its assets in companies which are expected to gain from science and technology advancement. It may invest a maximum of half of its assets in foreign firms. The technology mutual fund has a three year annualized return of 25.3%.
This fund has an expense ratio of 1.41% as compared to category average of 1.51%.
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.