Semiconductor sales are soaring, fueled by strong optimism around artificial intelligence (AI) and increasing demand from a wide range of industries. Tech stocks, especially semiconductors, have played a major role in driving the Wall Street rally over the past couple of years.

This year has especially been exceptional for the semiconductor industry after a stellar 2024, with high demand for chips expected to push sales even higher in the coming months. Given this favorable environment, investors may want to consider mutual funds that focus on semiconductors, such as Janus Henderson Global Technology and Innovation Fund (JNGTX Quick QuoteJNGTX - Free Report) , DWS Science and Technology A (KTCAX Quick QuoteKTCAX - Free Report) and T. Rowe Price Science & Tech (PRSCX Quick QuotePRSCX - Free Report) , could be a strategic investment move.

Strong Demand Fuels Semiconductor Growth

The Semiconductor Industry Association (SIA)said last week that global semiconductor sales hit $64.9 billion in August, jumping 4.4% from July’s total of $62.1 billion. Compared to August 2024, sales were up 21.7% from $53.3 billion.

The report highlighted that the growth was led by strong performance in the Asia Pacific and Americas regions, with significant gains in memory and logic chip sales. Year over year, sales surged 43.1% in the Asia Pacific/Other regions and 25.5% in the Americas, followed by 12.4% growth in China and 4.4% in Europe.

In total, semiconductor sales hit $179.7 billion in the second quarter, up 7.8% from the first quarter. This followed a record-breaking 2024, when chip sales reached $627.6 billion, a 19.1% rise from $526.8 billion in 2023.

Much of this momentum has been driven by soaring demand for data center processors and memory chips. With AI investments continuing to grow, experts expect the semiconductor market to maintain double-digit growth through 2025.

3 Best Choices

We have, thus, selected three mutual funds with significant exposure to semiconductor producers. These funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to gain from the above factors. Moreover, these funds have encouraging three- and five-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Janus Henderson Global Technology and Innovation Fund aims for long-term growth of capital and specializes in technology. JNGTX invests at least the majority of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology.

Janus Henderson Global Technology and Innovation Fund has a track of positive total returns for over 10 years. Specifically, JNGTX’s returns over the three and five-year benchmarks are 30.8% and 14.2%, respectively. The annual expense ratio of 0.83% is lower than the category average of 0.99%. Janus Henderson Global Technology and Innovation Fund has a Zacks Mutual Fund Rank #1.

To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.

DWS Science and Technology A fund seeks growth of capital. Under normal circumstances, KTCAX invests at least 80% of its net assets in common stocks of U.S. companies in the technology sector.

DWS Science and Technology A fund has a track record of positive total returns for over 10 years.  Specifically, KTCAX’s returns over the three and five-year benchmarks are 30.2% and 15.5%, respectively. DWS Science and Technology A fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.88, which is lower than the category average of 1.03%.

To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.

T. Rowe Price Science & Tech fund seeks to invest in long-term capital growth by investing at least 80% of net assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement, and use of science and technology. While most of PRSCX’s assets are invested in U.S. common stocks, other securities may also be purchased, including foreign stocks, futures, and options, in keeping with the fund’s objectives.

T. Rowe Price Science & Tech has a track record of positive total returns for over 10 years. Specifically, PRSCX’s returns over the three and five-year benchmarks are 29.7% and 13.4%, respectively. PRSCX’s annual expense ratio of 0.81% is lower than the category average of 1.05%. PRSCX has a Zacks Mutual Fund Rank #1.

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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