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Play 3 Technology Mutual Funds as Cloud, Mobile Fuel Profits
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More often than not, the technology sector reports relatively above par earnings fueled by demand for technology and innovation. During the second quarter, big tech firms posted better-than-expected earnings due to their focus on cloud and mobile devices. Both Amazon.com, Inc. (AMZN - Free Report) and Microsoft Corporation (MSFT - Free Report) beat estimates courtesy of their moves to host other companies’ data on their computer services, also known as cloud.
Mobile ad revenues were instrumental in driving Facebook, Inc.’s convincing earnings beat for the second quarter. As companies bought more of its mobile ads and users increased their clicks on those ads, Alphabet Inc. (GOOGL - Free Report) ended up posting a blockbuster second-quarter performance. Older tech companies like Cisco Systems, Inc. (CSCO - Free Report) have also rallied this year, partly because investors favored dividend-paying stocks, a feature that they had deliberately avoided for quite some time.
However, technology stocks are considered more volatile than other sector stocks in the short run. In order to minimize this short-term volatility, almost all tech funds adopt a growth management style with focus on strong fundamentals and a relatively broader investment horizon. Investors having an above par appetite for risk and a fairly longer investment horizon should park their savings in these funds.
Fidelity Advisor Electronics A (FELAX - Free Report) seeks capital appreciation. FELAX invests a large portion of its assets in common stocks of companies whose primary operations are related to electronic components, equipment vendors, electronic component manufacturers, electronic component distributors, electronic instruments and electronic systems vendors. Investments are made in both domestic and foreign companies. FELAX uses a fundamental analysis to select companies for investment purposes. Fidelity Advisor Electronics A is a non-diversified fund and has a three-year annualized return of almost 22%.
FELAX has an expense ratio of 1.27% as compared to the category average of 1.51%.
MFS Technology B (MTCBX - Free Report) invests a large chunk of its assets in securities of companies involved in operations related to products and services that are believed to benefit from advancement and improvement of technology. MTCBX invests in securities issued throughout the globe including those from emerging markets. MFS Technology B is a non-diversified fund and has a three-year annualized return of 13.9%.
Matthew D. Sabel is the fund manager since 2011.
Putnam Global Technology A (PGTAX - Free Report) seeks growth of capital. PGTAX generally invests in common stocks of both mid and large sized companies across the world. The fund invests a major portion of its assets in securities of companies in the technology industries. Putnam Global Technology A is non-diversified and has a three-year annualized return of 17.1%.
PGTAX has an expense ratio of 1.26% as compared to the category average of 1.51%.
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Play 3 Technology Mutual Funds as Cloud, Mobile Fuel Profits
More often than not, the technology sector reports relatively above par earnings fueled by demand for technology and innovation. During the second quarter, big tech firms posted better-than-expected earnings due to their focus on cloud and mobile devices. Both Amazon.com, Inc. (AMZN - Free Report) and Microsoft Corporation (MSFT - Free Report) beat estimates courtesy of their moves to host other companies’ data on their computer services, also known as cloud.
Mobile ad revenues were instrumental in driving Facebook, Inc.’s convincing earnings beat for the second quarter. As companies bought more of its mobile ads and users increased their clicks on those ads, Alphabet Inc. (GOOGL - Free Report) ended up posting a blockbuster second-quarter performance. Older tech companies like Cisco Systems, Inc. (CSCO - Free Report) have also rallied this year, partly because investors favored dividend-paying stocks, a feature that they had deliberately avoided for quite some time.
However, technology stocks are considered more volatile than other sector stocks in the short run. In order to minimize this short-term volatility, almost all tech funds adopt a growth management style with focus on strong fundamentals and a relatively broader investment horizon. Investors having an above par appetite for risk and a fairly longer investment horizon should park their savings in these funds.
Below we share with you three buy-rated technology mutual funds. Each has earned 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, their Zacks Rank and past performance.
Fidelity Advisor Electronics A (FELAX - Free Report) seeks capital appreciation. FELAX invests a large portion of its assets in common stocks of companies whose primary operations are related to electronic components, equipment vendors, electronic component manufacturers, electronic component distributors, electronic instruments and electronic systems vendors. Investments are made in both domestic and foreign companies. FELAX uses a fundamental analysis to select companies for investment purposes. Fidelity Advisor Electronics A is a non-diversified fund and has a three-year annualized return of almost 22%.
FELAX has an expense ratio of 1.27% as compared to the category average of 1.51%.
MFS Technology B (MTCBX - Free Report) invests a large chunk of its assets in securities of companies involved in operations related to products and services that are believed to benefit from advancement and improvement of technology. MTCBX invests in securities issued throughout the globe including those from emerging markets. MFS Technology B is a non-diversified fund and has a three-year annualized return of 13.9%.
Matthew D. Sabel is the fund manager since 2011.
Putnam Global Technology A (PGTAX - Free Report) seeks growth of capital. PGTAX generally invests in common stocks of both mid and large sized companies across the world. The fund invests a major portion of its assets in securities of companies in the technology industries. Putnam Global Technology A is non-diversified and has a three-year annualized return of 17.1%.
PGTAX has an expense ratio of 1.26% as compared to the category average of 1.51%.
To view the Zacks Rank and past performance of all technology mutual funds, investors can click here to see the complete list of funds.
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