Investors seeking long-term growth and robust returns often turn to technology mutual funds, buoyed by improving industry fundamentals and the rise of emerging technologies such as Artificial Intelligence (AI), Machine Learning (ML), robotics, and data science.
These funds typically adopt a growth-oriented approach, focusing on companies with strong fundamentals and promising investment prospects within the technology sector, which has expanded to include not only hardware and software but also social media and internet companies.
Here, we present three top-performing technology mutual funds, all boasting a Zacks Mutual Fund Rank #1 (Strong Buy), indicating their potential to outshine peers in the future. These funds are:
1. Fidelity Select Software & IT Services Portfolio (FSCSX): This fund primarily invests in securities of domestic and foreign companies engaged in the research, design, production, or distribution of software or information-based services. FSCSX advisors employ fundamental analysis factors to guide their investment decisions, considering each issuer’s financial condition, industry position, and market conditions. The fund has delivered impressive five-year annualized returns of 19.6%, with a notable investment in Samsung Electronics.
2. Fidelity Select Tech Hardware (FDCPX): FDCPX focuses on securities of companies involved in the development, manufacture, or distribution of tech hardware, both domestically and internationally. Like FSCSX, FDCPX advisors rely on fundamental analysis factors to guide investment decisions, resulting in five-year annualized returns of 17.4%. With an expense ratio of 0.73%, FDCPX outperforms the category average of 1.05%.
3. Matthews Asia Innovators Investor (MATFX): This fund primarily invests in common and preferred stocks of companies located in Asia, with a focus on innovators in their respective fields. MATFX advisors seek companies demonstrating innovation in products, services, processes, or business models. Despite a more modest five-year annualized return of 7.2%, MATFX offers exposure to Asian innovators and is managed by Inbok Song since April 2023.
While these funds have demonstrated strong performance, investors are encouraged to conduct thorough research and consider their investment goals and risk tolerance before making any investment decisions.
For comprehensive insights into the Zacks Rank and past performance of all Technology Mutual Funds, investors can access the complete list of Technology funds.
For investors seeking key mutual fund information delivered directly to their inbox, Zacks’ free Fund Newsletter offers top news, analysis, and performance updates on a weekly basis.
Additionally, Zacks identifies #1 Semiconductor Stock, poised for significant growth amid the burgeoning demand for Artificial Intelligence, Machine Learning, and Internet of Things. With robust earnings growth and an expanding customer base, this semiconductor stock presents ample opportunity for investors amidst the projected surge in global semiconductor manufacturing from $452 billion in 2021 to $803 billion by 2028.
