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 brighter earnings performance than others owing to greater demand for technology and innovation. Improving industry fundamentals and emerging technologies, such as wearables, VR headsets, drones, virtual reality devices and AI are the key catalysts for the sector.
Meanwhile, most mutual funds investing in securities from these sectors prefer a growth-oriented approach that includes focusing on companies with strong fundamentals and a relatively higher investment prospect. Moreover, technology now has a broader coverage than just hardware and software companies. Social media and Internet companies are also part of the technology landscape today.
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 funds.
Red Oak Technology Select Fund (ROGSX - Free Report) seeks long-term capital appreciation. The fund invests the majority of its assets in equity securities of companies operating in the technology sector. Although the fund mostly invests in common stocks of U.S. companies, it may also invest in securities of foreign issuers and American Depositary Receipts that satisfy the fund’s investment criteria. ROGSX has returned 11.7% in the past three years.
As of the end of March 2020, ROGSX held 30 issues with 8.58% of its assets invested in Microsoft Corp.
T. Rowe Price Communications & Technology Fund Investor Class (PRMTX - Free Report) invests heavily in securities of communications and technology companies. PRMTX may invest in securities of U.S. as well as non-U.S. companies. These companies are involved in a variety of Internet-related industries such as e-commerce and digital products, and services firms, media, including publishing, advertising, broadcasting, and cable and satellite TV companies. PRMTX has three-year annualized returns of 13.5%.
James Stillwagon is the fund manager of PRMTX since 2019.
Fidelity Select Wireless Portfolio (FWRLX - Free Report) fund aims for capital appreciation. It invests the majority of its assets in securities of companies that are engaged in activities relating to wireless communications services or products. FWRLX has three-year annualized returns of 8.4%.
FWRLXhas an expense ratio of 0.81% compared to the category average of 1.23%.
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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