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 artificial intelligence, machine learning, robotics and data science are the key catalysts to the sector’s growth.
Meanwhile, most of the mutual funds investing in securities from these sectors take 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 four 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 funds, their Zacks Rank and past performance.
T. Rowe Price Science and Technology Fund (PRSCX - Free Report) aims for long-term capital gain. The fund invests heavily in the common stocks of companies that are expected to gain from the development and use of science and/or technology. The non-diversified fund invests in American and foreign issuers alike. PRSCX has annualized returns of 14.7%.
As of March 2019, PRSCX held 38 issues with 11.26% of its assets invested in Facebook Inc A.
Columbia Seligman Communications and Information Fund Class A (SLMCX - Free Report) seeks capital growth. The fund invests the majority of its assets in securities of companies that operate in the communications, information and related industries. The non-diversified fund invests in information technology, telecommunications as well as media companies. SLMCX has returned 20.9% in a year.
SLMCX has an expense ratio of 1.23% as compared to the category average of 1.29%.
Fidelity Select Multimedia (FBMPX - Free Report) fund aims for capital growth. The fund invests most of its assets in securities of organizations that are mostly engaged in development, production or distribution of communication services. The non-diversified fund invests in U.S. and non-U.S. issuers alike. FBMPX has annualized returns of 27.6%.
Matthew Drukker is the fund manager of FBMPX since 2018.
Franklin DynaTech Fund Class A (FKDNX - Free Report) aims for capital growth and mostly invests in common stocks of companies. The fund mostly invests in equity securities of companies that the investment manager believes are doing a great job in innovation and execution of new technologies, have superior management, and gaining from new industry conditions. FKDNX has returned 21.3% in a year.
FKDNX has an expense ratio of 0.87% as compared with the category average of 1.07%.
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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