Back to top

Image: Bigstock

3 Technology Mutual Funds for Solid Returns

Read MoreHide Full Article

Investors willing to take risks and seeking healthy returns over a fairly long investment horizon may opt for technology mutual funds. The technology sector is believed to be 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 artificial intelligence — are the key catalysts for the sector.

Meanwhile, most mutual funds investing in securities from these sectors prefer a growth-oriented approach, focusing on companies with strong fundamentals and relatively higher investment prospects. 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 technology mutual funds, viz., Fidelity Select Software & IT Svcs Port (FSCSX - Free Report) , Red Oak Technology Select Fund (ROGSX - Free Report) and DWS Science and Technology Fund (KTCAX - Free Report) . Each has 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 technology funds.

Fidelity Select Software & IT Svcs Port seeks capital appreciation. FSCSX invests most of its assets in common stocks of companies principally engaged in research, design, production, or distribution of products or processes that relate to software or information-based services.

Fidelity Select Software & IT Svcs Port has three-year annualized returns of 8.5%. As of the end of August 2023, FSCSX held 67 issues, with 23.4% of its assets invested in Microsoft Corp.

Red Oak Technology Select Fund seeks long-term capital growth by investing primarily in stocks of companies that rely extensively on technology in their product development or operations or the ones that may be experiencing growth in sales and earnings driven by technology-related products and services. ROGSX also invests in technology companies that develop, produce, or distribute products or services related to computers, semiconductors and electronics.

Red Oak Technology Select has three-year annualized returns of 8.4%. Robert D. Stimpson has been the fund manager of ROGSX since January 2019.

DWS Science and Technology Fund seeks capital appreciation by investing most of its assets in common stocks of U.S. companies in the technology sector. KTCAX advisors use in-depth research to select a diverse portfolio of technology companies that have robust and sustainable earnings growth, large and growing markets, leading products and services and strong balance sheets.

DWS Science and Technology Fund has three-year annualized returns of 6.9%. KTCAX has an expense ratio of 0.91% compared with the category average of 1.05%.

To view the Zacks Rank and the past performance of all Technology Mutual Funds, investors can click here to see the complete list of Technology 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 >>

Published in