The tech-heavy NASDAQ composite has risen 17.63% over the past year compared with 14.2% and 9.5% gains in the S&P 500 and the Dow, respectively. The NASDAQ 100 Technology Sector Index rose 42.72% over the same period. Due to a boom in artificial intelligence (AI), cloud computing, semiconductors, data centers and digital infrastructure sectors, the tech industry in the United States has given investors handsome returns over the past years. Investors who had parked their money in tech stocks have earned attractive returns owing to the recent advancement in the industry.

Inflation remains above the Federal Reserve’s 2% target, while interest rates also remain relatively high. Due to the constant need for development, technology companies are generally interest rate sensitive. Costs incurred in research and development and other related expenditures are generally high. The Federal Reserve’s recent hawkish stance to counter inflation by a quarter-basis-point interest rate hike amid rising fuel prices has led to a high borrowing cost. This has created major challenges in tech companies’ path to profitability. The U.S. economy therefore presents a mixed environment of growth opportunities alongside inflation and valuation risks.

The future of the tech industry remains optimistic. The new wave of regenerative AI, machine learning, cloud computing, the Internet of Things, and robotics is also expected to drive growth among tech stocks. For investors, technology mutual funds can provide diversified exposure to the long-term growth of the technology sector without requiring them to select individual stocks. It will be prudent to invest in mutual funds having tech companies as their holdings for better returns in the long run.

We have thus selected three tech mutual funds like Fidelity Advisor Semiconductors Fund (FELIX Quick QuoteFELIX - Free Report) , Fidelity Select Tech Hardware (FDCPX Quick QuoteFDCPX - Free Report) and Columbia Seligman Technology And Information Fund (SCMIX Quick QuoteSCMIX - Free Report) . These funds boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000, and carry a lower expense ratio of less than 1%. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Fidelity Advisor Semiconductors Fund invests most of its assets in common stocks of both foreign and domestic companies that are primarily engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FELIX advisors make investment decisions based on fundamental analysis of factors like financial condition and industry position, as well as market and economic conditions.

Sonu Kalra has been the lead manager of FELIX since July 15, 2026. Most of the fund’s exposure was in companies like NVIDIA (21.8%), Broadcom (11.9%) and Marvell Technology (9%) as of April 30, 2026.

FELIX’s three-year and five-year annualized returns are nearly 49.4% and 34.8%, respectively. FELIX has an annual expense ratio of 0.66%.

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

Fidelity Select Tech Hardware fund invests most of its net assets in common stocks of domestic and foreign companies that are principally engaged in development, manufacture, or distribution of tech hardware. FDCPX advisors choose to invest in stocks based on fundamental analysis factors like financial condition and industry position, along with market and economic conditions.

Aidan Reynold Stevovich Brandt has been the lead manager of FDCPX since Jan. 2, 2024. Most of the fund’s exposure was in companies like Cisco (11.7%), Western Digital (8.7%) and Apple (7.7%) as of May 30, 2026.

FDCPX’s three-year and five-year annualized returns are 46.5% and 24.7%, respectively. FDCPX has an annual expense ratio of 0.67%.

Columbia Seligman Technology And Information Fund invests most of its net assets in equity securities of technology and information companies with operations in the information technology and communications services sectors, applying a global industry classification standard amended from time to time, to determine industry/sector classifications, as well as other related industries. SCMIX advisors also invest a small portion of their investment in foreign issues.

Paul H. Wick has been the lead manager of SCMIX since Jan. 1, 1990, and most of the fund’s holdings were in companies like Bloom Energy (10.2%), Lam Research (7.5%) and Marvell Technology (6.2%) as of May 31, 2026.

SCMIX’s three-year and five-year returns are 42.9% and 24.2%, respectively. SCMIX has an annual expense ratio is 0.86%.

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 >>