The technology sector is more likely to report relatively better earnings than the other sectors as demand for technology and innovation remains high. However, technology stocks are considered more volatile than other sector-specific 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 higher investment horizon. Investors having a big appetite for risk and a fairly longer investment horizon should park their savings in these funds. Further, mutual funds from the technology sector returned 2.5% in the last three months, according to Morningstar.
Below we share with you three top-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 Select Semiconductors (FSELX - Free Report) invests the bulk of its assets in common stocks of companies involved in manufacture, design and sale of electronic equipments and components. FSELX seeks growth of capital. The fund invests not only in U.S. companies but also in non-U.S. companies. FSELX analyses the industry position and financial condition of companies to select for investments. This non-diversified fund has a three-year annualized return of 25.2%.
FSELX has an expense ratio of 0.74% as compared to the category average of 1.48%.
Janus Global Technology T (JAGTX - Free Report) seeks capital appreciation for the long run. JAGTX invests the lion’s share of its assets in equity securities of those companies that are expected to gain from any improvements or advances in technology. The fund invests in both domestic and foreign companies with stable growth potential. Janus Global Technology T has a three-year annualized return of 11.4%.
J. Slingerlend is one of the fund managers of JAGTX since 2011.
Fidelity Select Software & IT Services Portfolio (FSCSX - Free Report) invests the majority of its assets in companies whose primary operations are related to software or information-based services. FSCSX primarily focuses on acquiring common stocks of both domestic and foreign companies. The fund uses fundamental analysis to select companies for investment purposes. Fidelity Select Software & IT Services Portfolio has a three-year annualized return of 12.6%.
As of September 2016, FSCSX held 63 issues, with 10.66% of its assets invested in Facebook Inc.
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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