We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Top Tech Funds to Buy as Fed Slows Down on Rate Hikes
Read MoreHide Full Article
The tech sector has been one of the best performers of 2023 after staging a roaring comeback from last year’s lows. The Federal Reserve has aggressively hiked interest rates this year to bring down inflation but that hasn’t hampered the tech rally much.
The rally primarily was fueled by the excitement surrounding artificial intelligence (AI), which attracted investors to this sector. Although the excitement somewhat faded after the first seven months of the year, the tech sector has been resilient. This has seen the S&P 500’s Technology Select Sector SPDR (XLK) rally 46.5% this year as of Nov 15.
Tech Rally to Continue
The Federal Reserve has increased interest rates by 525 basis points since March 2022 to curb multi-decade high inflation. This Fed’s benchmark interest rate is now in the range of 5.25-5.5%, which has been weighing on most of the sectors. Tech stocks are particularly at risk because higher interest rates typically have a negative impact on growth sectors such as technology.
The negative sentiment has at times taken a toll on tech stocks this year but they have bounced back every time. The biggest evidence is perhaps the Nasdaq rally. The tech-heavy Nasdaq has advanced 34.8% year to year.
Although the S&P 500’s jump has been slower, with the index rising 17.3% year to date, the advancement can primarily be attributed to tech giants like Amazon.com, Apple, Microsoft, Tesla and Alphabet.
The tech rally resumed once again in November, which so far has been a great month for the broader market after the Federal Reserve kept interest rates unaltered for the second time in a row in its last FOMC meeting.
Moreover, signs of cooling inflation have also raised expectations that the central bank may be over with its monetary tightening campaign and will start rate cuts in 2024. Lower borrowing costs bode well for the tech sector.
3 Best Choices
As a result, we've chosen three funds from the tech sector that are worth buying. These funds have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Semiconductors Portfolio (FSELX - Free Report) fund seeks capital appreciation. FSELX normally invests at least 80% of its assets in common stocks of companies principally engaged in the design, manufacture, or sale of electronic components (semiconductors, connectors, printed circuit boards, and other components); equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Select Semiconductors Portfolio has a track of positive total returns for over 10 years. Specifically, FSELX’s returns over the three and five-year benchmarks are 21.8% and 27.2%, respectively. The annual expense ratio of 0.69% is lower than the category average of 1.05%. FSELX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
Columbia Seligman Technology and Information Fund (SLMCX - Free Report) seeks to achieve capital gain. SLMCX invests at least 80% of its net assets in the securities of companies operating in the communications, information and related industries.
Columbia Seligman Technology and Information Fund has a track of positive total returns for over 10 years. Specifically, SLMCX’s returns over the three and five-year benchmarks are 13.7% and 18.6%, respectively. The annual expense ratio of 0.95% is lower than the category average of 1.05%. SLMCX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
T. Rowe Price Science & Tech (PRSCX - Free Report) fund seeks to invest in long-term capital growth by investing at least 80% of net assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement, and use of science and technology. While most of PRSCX’s assets are invested in U.S. common stocks, other securities may also be purchased, including foreign stocks, futures, and options, in keeping with the fund objectives.
T. Rowe Price Science & Tech has a track of positive total returns for over 10 years. Specifically, PRSCX returns over the three and five-year benchmarks are 2.4% and 12.4%, respectively. The annual expense ratio of 0.69% is lower than the category average of 1.05%. PRSCX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Top Tech Funds to Buy as Fed Slows Down on Rate Hikes
The tech sector has been one of the best performers of 2023 after staging a roaring comeback from last year’s lows. The Federal Reserve has aggressively hiked interest rates this year to bring down inflation but that hasn’t hampered the tech rally much.
The rally primarily was fueled by the excitement surrounding artificial intelligence (AI), which attracted investors to this sector. Although the excitement somewhat faded after the first seven months of the year, the tech sector has been resilient. This has seen the S&P 500’s Technology Select Sector SPDR (XLK) rally 46.5% this year as of Nov 15.
Tech Rally to Continue
The Federal Reserve has increased interest rates by 525 basis points since March 2022 to curb multi-decade high inflation. This Fed’s benchmark interest rate is now in the range of 5.25-5.5%, which has been weighing on most of the sectors. Tech stocks are particularly at risk because higher interest rates typically have a negative impact on growth sectors such as technology.
The negative sentiment has at times taken a toll on tech stocks this year but they have bounced back every time. The biggest evidence is perhaps the Nasdaq rally. The tech-heavy Nasdaq has advanced 34.8% year to year.
Although the S&P 500’s jump has been slower, with the index rising 17.3% year to date, the advancement can primarily be attributed to tech giants like Amazon.com, Apple, Microsoft, Tesla and Alphabet.
The tech rally resumed once again in November, which so far has been a great month for the broader market after the Federal Reserve kept interest rates unaltered for the second time in a row in its last FOMC meeting.
Moreover, signs of cooling inflation have also raised expectations that the central bank may be over with its monetary tightening campaign and will start rate cuts in 2024. Lower borrowing costs bode well for the tech sector.
3 Best Choices
As a result, we've chosen three funds from the tech sector that are worth buying. These funds have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Semiconductors Portfolio (FSELX - Free Report) fund seeks capital appreciation. FSELX normally invests at least 80% of its assets in common stocks of companies principally engaged in the design, manufacture, or sale of electronic components (semiconductors, connectors, printed circuit boards, and other components); equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Select Semiconductors Portfolio has a track of positive total returns for over 10 years. Specifically, FSELX’s returns over the three and five-year benchmarks are 21.8% and 27.2%, respectively. The annual expense ratio of 0.69% is lower than the category average of 1.05%. FSELX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
Columbia Seligman Technology and Information Fund (SLMCX - Free Report) seeks to achieve capital gain. SLMCX invests at least 80% of its net assets in the securities of companies operating in the communications, information and related industries.
Columbia Seligman Technology and Information Fund has a track of positive total returns for over 10 years. Specifically, SLMCX’s returns over the three and five-year benchmarks are 13.7% and 18.6%, respectively. The annual expense ratio of 0.95% is lower than the category average of 1.05%. SLMCX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
T. Rowe Price Science & Tech (PRSCX - Free Report) fund seeks to invest in long-term capital growth by investing at least 80% of net assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement, and use of science and technology. While most of PRSCX’s assets are invested in U.S. common stocks, other securities may also be purchased, including foreign stocks, futures, and options, in keeping with the fund objectives.
T. Rowe Price Science & Tech has a track of positive total returns for over 10 years. Specifically, PRSCX returns over the three and five-year benchmarks are 2.4% and 12.4%, respectively. The annual expense ratio of 0.69% is lower than the category average of 1.05%. PRSCX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
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 >>