Risk lovers seeking healthy returns over a fairly long investment horizon may opt for technology mutual funds. It is believed that the technology sector is poised for a brighter earnings performance than the other sectors due to greater demand for technology and innovation. Improving industry fundamentals and emerging technologies such as wearables, VR headsets, drones, virtual reality devices, and artificial intelligence are the key catalysts to the sector’s growth.
Meanwhile, most of the mutual funds investing in securities from these sectors opt for a growth-oriented approach that includes focusing on companies with strong fundamentals and a relatively higher investment prospect. Moreover, technology has come to have a broader meaning than just hardware and software companies. Social media and internet companies are now part of the technology landscape.
Below we share with you three top-ranked 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 Technology Fund I Class (FATIX - Free Report) invests the lion’s share of its assets in securities of companies involved in offering, using and developing products, processes, or services that benefit greatly from technological innovation. FATIX seeks to invest in common stocks of both U.S. and non U.S. companies. Fidelity Advisor Technology Fund I Class provides three-year annualized return of 18.7%.
As of June 2017, FATIX held 139 issues with 10.33% of its assets invested in Apple Inc.
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 equipment and components. FSELX seeks growth of capital. The fund invests in both U.S. companies and non-U.S. companies. The fund analyses the industry position and financial condition of companies to select for investments. This non-diversified fund has a three-year annualized return of 20.4%.
FSELX has an expense ratio of 0.75% as compared to the category average of 1.42%.
Fidelity Select Technology Portfolio (FSPTX - Free Report) seeks capital growth over the long run. FSPTX invests a large chunk of its assets in common stocks of companies primarily involved in production, development and sale of products used for technological advancement. The fund invests in both U.S. and non-U.S. companies. Factors including financial strength and economic condition are considered before investing in a company. Fidelity Select Technology Portfolio is non-diversified and has a three-year annualized return of 18.5%.
Charlie Chai is the fund manager of FSPTX since 2007.
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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