Risk lovers seeking healthy returns over a fairly long investment horizon may opt for technology mutual funds. The technology sector is believed to be poised for a brighter earnings performance than others, owing to innovation and greater demand. Improving industry fundamentals and emerging technologies — such as wearables, VR headsets, drones, virtual reality devices and artificial intelligence — are the key catalysts for the sector.
Meanwhile, most mutual funds investing in securities from these sectors prefer a growth-oriented approach, focusing on companies with strong fundamentals and relatively higher investment prospects. Technology now has 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 technology mutual funds, viz., Fidelity Select Technology Fund FSPTX, T. Rowe Price Science and Technology Fund PRSCX and DWS Science and Technology Fund KTCAX. Each has 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.
Fidelity Select Technology Fund seeks capital appreciation. FSPTX invests the majority of its assets in common stocks of companies principally engaged in offering, using, or developing products, processes, or services that will provide or will benefit significantly from technological advances and improvements.
Fidelity Select Technology Fund has three-year annualized returns of 14.3%. FSPTX has an expense ratio of 0.69% compared with the category average of 1.05%.
T. Rowe Price Science and Technology Fund seeks long-term capital growth by investing in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement, and use of science and technology. PRSCX advisors invest in foreign stocks, futures and options.
T. Rowe Price Science and Technology Fund has three-year annualized returns of 8.5%. As of the end of March 2023, PRSCX held 67 issues, with 10.7% of its assets invested in Microsoft Corp.
DWS Science and Technology Fund seeks capital appreciation by investing most of its assets in the common stocks of U.S. companies in the technology sector. KTCAX advisors usein-depth research to select a diverse portfolio of technology companies that have robust and sustainable earnings growth, large and growing markets, leading products and services and strong balance sheets.
DWS Science and Technology Fund has three-year annualized returns of 10%. Sebastian P. Werner has been the fund manager of KTCAX since November 2017.
To view the Zacks Rank and the past performance of all Technology Mutual Funds, investors can click here to see the complete list of Technology funds.
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