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3 Tech Funds Set to Gain From the Ongoing Market Rally
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Last week turned out to be one of the best for Wall Street in recent years, with all three major indexes surging to fresh highs and hitting new milestones. The broad rally is being fueled by Donald Trump’s win in the U.S. presidential election.
The Dow, S&P 500, and Nasdaq closed 4.6%, 4.7%, and 5.7% higher for the week, respectively. Also, the Federal Reserve’s second interest rate in three months has been boosting investors’ sentiment. Given this positive sentiment, investing in tech funds like DWS Science and Technology A (KTCAX - Free Report) , Red Oak Technology Select (ROGSX - Free Report) and Fidelity Select Semiconductors Portfolio (FSELX - Free Report) could be a wise decision.
Markets Rally After Trump Win, Fed Rate Cut
On Monday, the Dow and the S&P 500 extended their rally and closed above 44,000 and 6,000 points, respectively, for the first time. Earlier, on Nov. 6, the Dow jumped over 1,500 points after Trump’s decisive victory in the U.S. election, marking the largest single-day gain for the blue-chip index since November 2022 and the biggest post-election rally in 128 years.
Adding to the market momentum, the Federal Reserve further gave a boost to equities by cutting interest rates by 25 basis points on Thursday. This was the second rate cut in a row, following a 525 basis-point rate hike since March 2022, aimed at curbing inflation.
Investors are now expecting lower taxes and deregulation under Trump, who is vocal about his stance on the stock market and the dollar. Historically, election years tend to be favorable for markets, with indexes typically climbing after results are announced. In 2020, for instance, the Dow was around 28,000 by October’s end and rallied past 30,000 shortly after the November election.
The broader market rally is primarily being driven by tech stocks, which have performed well since 2023. The Federal Reserve’s rate cut is further going to help 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).
DWS Science and Technology A fund seeks growth of capital. Under normal circumstances, KTCAX invests at least 80% of net assets in common stocks of U.S. companies in the technology sector.
DWS Science and Technology A fund has a track of positive total returns for over 10 years. Specifically, KTCAX’s returns over the three and five-year benchmarks are 9.6% and 20.6%, respectively. KTCAX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.87%, which is lower than its category average.
To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.
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 which may be experiencing growth in sales and earnings driven by technology-related products and services. ROGSX primarily invests in technology companies that develop, produce, or distribute products or services related to computers, semiconductors and electronics.
Specifically, Red Oak Technology Select fund’s returns over the three and five-year benchmarks are 88% and 15.5%, respectively. The annual expense ratio of 0.91% is lower than the category average. ROGSX carries a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Semiconductors Portfolio 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 fund has a track of positive total returns for over 10 years. Specifically, FSELX’s returns over the three and five-year benchmarks are 24.2% and 33.4%, respectively. FSELX has a Zacks Mutual Fund Rank #1 and its annual expense ratio is 0.63%, which is lower than the category average.
To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.
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3 Tech Funds Set to Gain From the Ongoing Market Rally
Last week turned out to be one of the best for Wall Street in recent years, with all three major indexes surging to fresh highs and hitting new milestones. The broad rally is being fueled by Donald Trump’s win in the U.S. presidential election.
The Dow, S&P 500, and Nasdaq closed 4.6%, 4.7%, and 5.7% higher for the week, respectively. Also, the Federal Reserve’s second interest rate in three months has been boosting investors’ sentiment. Given this positive sentiment, investing in tech funds like DWS Science and Technology A (KTCAX - Free Report) , Red Oak Technology Select (ROGSX - Free Report) and Fidelity Select Semiconductors Portfolio (FSELX - Free Report) could be a wise decision.
Markets Rally After Trump Win, Fed Rate Cut
On Monday, the Dow and the S&P 500 extended their rally and closed above 44,000 and 6,000 points, respectively, for the first time. Earlier, on Nov. 6, the Dow jumped over 1,500 points after Trump’s decisive victory in the U.S. election, marking the largest single-day gain for the blue-chip index since November 2022 and the biggest post-election rally in 128 years.
Adding to the market momentum, the Federal Reserve further gave a boost to equities by cutting interest rates by 25 basis points on Thursday. This was the second rate cut in a row, following a 525 basis-point rate hike since March 2022, aimed at curbing inflation.
Investors are now expecting lower taxes and deregulation under Trump, who is vocal about his stance on the stock market and the dollar. Historically, election years tend to be favorable for markets, with indexes typically climbing after results are announced. In 2020, for instance, the Dow was around 28,000 by October’s end and rallied past 30,000 shortly after the November election.
The broader market rally is primarily being driven by tech stocks, which have performed well since 2023. The Federal Reserve’s rate cut is further going to help 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).
DWS Science and Technology A fund seeks growth of capital. Under normal circumstances, KTCAX invests at least 80% of net assets in common stocks of U.S. companies in the technology sector.
DWS Science and Technology A fund has a track of positive total returns for over 10 years. Specifically, KTCAX’s returns over the three and five-year benchmarks are 9.6% and 20.6%, respectively. KTCAX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.87%, which is lower than its category average.
To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.
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 which may be experiencing growth in sales and earnings driven by technology-related products and services. ROGSX primarily invests in technology companies that develop, produce, or distribute products or services related to computers, semiconductors and electronics.
Specifically, Red Oak Technology Select fund’s returns over the three and five-year benchmarks are 88% and 15.5%, respectively. The annual expense ratio of 0.91% is lower than the category average. ROGSX carries a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Semiconductors Portfolio 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 fund has a track of positive total returns for over 10 years. Specifically, FSELX’s returns over the three and five-year benchmarks are 24.2% and 33.4%, respectively. FSELX has a Zacks Mutual Fund Rank #1 and its annual expense ratio is 0.63%, which is lower than the category average.
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 >>