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The technology sector emerged as a standout performer during the first half of 2023, thanks to impressive advancements in Artificial Intelligence (AI) and the strong performance of mega-cap technology stocks. These stocks have played a crucial role in driving the market's performance this year. As we close out a successful second quarter and an exceptional first half, it is evident that the technology sector will continue to ascend.
Recent economic data has provided a further boost to the technology sector. In May, The Bureau of Economic Analysis reports showed a $91.2 billion increase(0.4%) in personal income and an $86.7 billion rise (0.4%) in disposable personal income (DPI). The thriving economy also witnessed growth in consumer spending, with an increase of $18.9 billion (0.1%). These positive indicators reflect a steady improvement in economic conditions, crucial for the sustained growth of the technology sector.
The technology sector's market enthusiasm primarily stems from the advancements made in AI-driven solutions to enhance efficiency, productivity and profitability. With continuous investments in AI research and development, the technology sector is well-positioned to capitalize on these advancements. Given the extraordinary performance of mega-cap technology stocks, favorable economic indicators and the promising potential of AI technology, investing in the technology sector offers attractive prospects
Investing in technology mutual funds seems to be judicious as of now. Also, mutual funds, in general, diversify portfolios without several commission charges that are mainly associated with stock purchases and trim transaction costs (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have, thus, chosen three technology mutual funds that investors should buy now for the long term. These funds possess a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided comparatively strong performance along with lower fees.
Fidelity Select Computer (FDCPX - Free Report) seeks capital appreciation. FDCPX invests most of its assets in common stocks of companies principally engaged in the research, design, development, manufacture, or distribution of products, processes, or services that relate to currently available or experimental hardware technology within the computer industry.
Elliot Mattingly has been the lead manager of FDCPX since Jan3, 2022. Most of the fund’s holdings were in companies like Cisco Systems (11.5%), Sony Corp (11.4%) and Samsung Electronics Co (11%) as of Feb 28, 2023.
FDCPX’s 3-year and 5-year annualized returns are 17% and 13.4%, respectively. Its net expense ratio is 0.73% compared to the category average of 1.05%. FDCPX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
DWS Science and Technology Fund (KTCAX - Free Report) invests the majority of its net assets in common stocks of science and technology companies of any size. KTCAX focuses on one or more industries in the technology sector. The fund also invests in foreign securities and is non-diversified.
Sebastian P. Werner has been the lead manager of KTCAX since Nov 30, 2017. Most of the fund’s holdings were in companies like Microsoft (7.4%), Apple (7.1%) and Alphabet (6.9%) as of Jan 31, 2023.
KTCAX’s 3-year and 5-year returns are 10.9% and 13.4%, respectively. The annual expense ratio is 0.89% compared to the category average of 1.05%. KTCAX has a Zacks Mutual Fund Rank #1.
T. Rowe Price Science and Technology (PRSCX - Free Report) seeks long-term capital growth. PRSCX invests most of its assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement and use of science and technology.
Kennard W. Allen has been the lead manager of PRSCX since Dec 31, 2008. Most of the fund’s holdings were in companies like Microsoft (9.4%), Alphabet (9%) and Salesforce (8.7%) as of Dec 31, 2022.
PRSCX’s 3-year and 5-year returns are 8.6% and 10.3%, respectively. The annual expense ratio is 0.84% compared to the category average of 1.05%. PRSCX has a Zacks Mutual Fund Rank #1.
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3 Technology Mutual Funds Worth Investing In
The technology sector emerged as a standout performer during the first half of 2023, thanks to impressive advancements in Artificial Intelligence (AI) and the strong performance of mega-cap technology stocks. These stocks have played a crucial role in driving the market's performance this year. As we close out a successful second quarter and an exceptional first half, it is evident that the technology sector will continue to ascend.
Recent economic data has provided a further boost to the technology sector. In May, The Bureau of Economic Analysis reports showed a $91.2 billion increase(0.4%) in personal income and an $86.7 billion rise (0.4%) in disposable personal income (DPI). The thriving economy also witnessed growth in consumer spending, with an increase of $18.9 billion (0.1%). These positive indicators reflect a steady improvement in economic conditions, crucial for the sustained growth of the technology sector.
The technology sector's market enthusiasm primarily stems from the advancements made in AI-driven solutions to enhance efficiency, productivity and profitability. With continuous investments in AI research and development, the technology sector is well-positioned to capitalize on these advancements. Given the extraordinary performance of mega-cap technology stocks, favorable economic indicators and the promising potential of AI technology, investing in the technology sector offers attractive prospects
Investing in technology mutual funds seems to be judicious as of now. Also, mutual funds, in general, diversify portfolios without several commission charges that are mainly associated with stock purchases and trim transaction costs (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have, thus, chosen three technology mutual funds that investors should buy now for the long term. These funds possess a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided comparatively strong performance along with lower fees.
Fidelity Select Computer (FDCPX - Free Report) seeks capital appreciation. FDCPX invests most of its assets in common stocks of companies principally engaged in the research, design, development, manufacture, or distribution of products, processes, or services that relate to currently available or experimental hardware technology within the computer industry.
Elliot Mattingly has been the lead manager of FDCPX since Jan3, 2022. Most of the fund’s holdings were in companies like Cisco Systems (11.5%), Sony Corp (11.4%) and Samsung Electronics Co (11%) as of Feb 28, 2023.
FDCPX’s 3-year and 5-year annualized returns are 17% and 13.4%, respectively. Its net expense ratio is 0.73% compared to the category average of 1.05%. FDCPX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
DWS Science and Technology Fund (KTCAX - Free Report) invests the majority of its net assets in common stocks of science and technology companies of any size. KTCAX focuses on one or more industries in the technology sector. The fund also invests in foreign securities and is non-diversified.
Sebastian P. Werner has been the lead manager of KTCAX since Nov 30, 2017. Most of the fund’s holdings were in companies like Microsoft (7.4%), Apple (7.1%) and Alphabet (6.9%) as of Jan 31, 2023.
KTCAX’s 3-year and 5-year returns are 10.9% and 13.4%, respectively. The annual expense ratio is 0.89% compared to the category average of 1.05%. KTCAX has a Zacks Mutual Fund Rank #1.
T. Rowe Price Science and Technology (PRSCX - Free Report) seeks long-term capital growth. PRSCX invests most of its assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement and use of science and technology.
Kennard W. Allen has been the lead manager of PRSCX since Dec 31, 2008. Most of the fund’s holdings were in companies like Microsoft (9.4%), Alphabet (9%) and Salesforce (8.7%) as of Dec 31, 2022.
PRSCX’s 3-year and 5-year returns are 8.6% and 10.3%, respectively. The annual expense ratio is 0.84% compared to the category average of 1.05%. PRSCX has a Zacks Mutual Fund Rank #1.
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 >>