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3 Technology Mutual Funds Ahead of NASDAQ Composite YTD
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The technology sector has rewarded investors so far this year due to a boom in artificial intelligence and related sectors. The technology sector has been the forerunner in 2023. The tech-heavy NASDAQ composite has gained 22.2% over the year-to-date period.
The consumer price index for August rose 3.7% year on year from 3.2% in July. The inflation level saw a favorable decline to 3% till June. However, Fed Chair Jerome Powell has kept the overnight interest at 5.25-5.5%, which is the highest in 22 years since July 2023. The market expects the Fed to keep interest rates unchanged in its November meeting.
Technology companies are generally interest rate sensitive due to the constant need for development. Expenditures are high because of research and development, and other related costs. The Federal Reserve’s aggressive monetary policy tightening so far to counter inflation has led to a high borrowing cost. This has, in turn, impacted the profitability of tech companies.
The future of the tech industry remains optimistic. The new wave of regenerative artificial intelligence, machine learning, cloud computing, the Internet of Things, and robotics are also expected to drive growth among tech stocks. It will be prudent to invest in mutual funds, having tech companies as their holdings for better returns in the long run.
We have thus selected three mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, and minimum initial investments within $5000, and carry a lower expense ratio than the category average of 1.05%. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Semiconductors Portfolio (FSELX - Free Report) invests most of its assets in common stocks of both foreign and domestic companies that are primarily engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX advisors make investment decisions based on fundamental analysis factors like financial condition and industry position, as well as market and economic conditions.
Adam Benjamin has been the lead manager of FSELX since Mar 15, 2020. Of its net assets, the fund has invested 32.2% in NVIDIA, 8.3% in Marvell Technologies and 8.1% in NXP Semiconductors, along with various other tech companies as of 5/31/2023.
FSELX’s year-to-date, three-year and five-year annualized returns are nearly 39.6%, 26.6% and 26.5%, respectively. FSELX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.69%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
DWS Science and Technology (KTCSX - Free Report) fund invests most of its assets along with borrowings, if any, incommon stocks and initial public offerings of domestic science and technology companies, irrespective of their market capitalization. KTCSX advisors may also invest in foreign companies from the technology sector or other industries within the technology sector from developed and emerging market economies.
Sebastian P. Werner has been the lead manager of KTCSX since Nov 30, 2017. The fund has invested 11.1% in NVIDIA, 8.2% in Meta Platforms and 7.4% in Microsoft,along with various other tech companies as of 7/31/2023.
KTCSX’s year-to-date, three-year, and five-year annualized returns are 34.0%, 6.8% and 12.9%, respectively. KTCSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.73%,
Columbia Global Technology Growth Fund (CTYRX - Free Report) invests most of its assets along with borrowings, if any, in equity securities, common stocks, preferred stocks and convertible securities of technology companies. CTYRX advisors invest in companies that stand to gain from technological innovation and developments.
Rahul Narang has been the lead manager of CTYRX since Jul 16, 2012. The fund has invested 10.8% in Microsoft, 10.7% in Apple and 6.4% in NVIDIA, along with various other tech companies as of 5/31/2023.
CTYRX’s year-to-date, three-year, and five-year annualized returns are 31.4%, 8.1% and 13.8%, respectively. CTYRX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.95%.
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3 Technology Mutual Funds Ahead of NASDAQ Composite YTD
The technology sector has rewarded investors so far this year due to a boom in artificial intelligence and related sectors. The technology sector has been the forerunner in 2023. The tech-heavy NASDAQ composite has gained 22.2% over the year-to-date period.
The consumer price index for August rose 3.7% year on year from 3.2% in July. The inflation level saw a favorable decline to 3% till June. However, Fed Chair Jerome Powell has kept the overnight interest at 5.25-5.5%, which is the highest in 22 years since July 2023. The market expects the Fed to keep interest rates unchanged in its November meeting.
Technology companies are generally interest rate sensitive due to the constant need for development. Expenditures are high because of research and development, and other related costs. The Federal Reserve’s aggressive monetary policy tightening so far to counter inflation has led to a high borrowing cost. This has, in turn, impacted the profitability of tech companies.
The future of the tech industry remains optimistic. The new wave of regenerative artificial intelligence, machine learning, cloud computing, the Internet of Things, and robotics are also expected to drive growth among tech stocks. It will be prudent to invest in mutual funds, having tech companies as their holdings for better returns in the long run.
We have thus selected three mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, and minimum initial investments within $5000, and carry a lower expense ratio than the category average of 1.05%. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Semiconductors Portfolio (FSELX - Free Report) invests most of its assets in common stocks of both foreign and domestic companies that are primarily engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX advisors make investment decisions based on fundamental analysis factors like financial condition and industry position, as well as market and economic conditions.
Adam Benjamin has been the lead manager of FSELX since Mar 15, 2020. Of its net assets, the fund has invested 32.2% in NVIDIA, 8.3% in Marvell Technologies and 8.1% in NXP Semiconductors, along with various other tech companies as of 5/31/2023.
FSELX’s year-to-date, three-year and five-year annualized returns are nearly 39.6%, 26.6% and 26.5%, respectively. FSELX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.69%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
DWS Science and Technology (KTCSX - Free Report) fund invests most of its assets along with borrowings, if any, incommon stocks and initial public offerings of domestic science and technology companies, irrespective of their market capitalization. KTCSX advisors may also invest in foreign companies from the technology sector or other industries within the technology sector from developed and emerging market economies.
Sebastian P. Werner has been the lead manager of KTCSX since Nov 30, 2017. The fund has invested 11.1% in NVIDIA, 8.2% in Meta Platforms and 7.4% in Microsoft,along with various other tech companies as of 7/31/2023.
KTCSX’s year-to-date, three-year, and five-year annualized returns are 34.0%, 6.8% and 12.9%, respectively. KTCSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.73%,
Columbia Global Technology Growth Fund (CTYRX - Free Report) invests most of its assets along with borrowings, if any, in equity securities, common stocks, preferred stocks and convertible securities of technology companies. CTYRX advisors invest in companies that stand to gain from technological innovation and developments.
Rahul Narang has been the lead manager of CTYRX since Jul 16, 2012. The fund has invested 10.8% in Microsoft, 10.7% in Apple and 6.4% in NVIDIA, along with various other tech companies as of 5/31/2023.
CTYRX’s year-to-date, three-year, and five-year annualized returns are 31.4%, 8.1% and 13.8%, respectively. CTYRX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.95%.
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 >>