More often than not the technology sector is likely to report above par earnings than other sectors as the demand for technology and innovation remains high. However, technology stocks are considered to be more volatile than other sector specific stocks in the short run. In order to minimize this short-term volatility, almost all tech funds adopt a growth management style with a focus on strong fundamentals and a relatively higher investment horizon. Investors having an above par appetite for risk and fairly longer investment horizon should park their savings in these funds.
Below we will share with you 5 potential rated technology mutual funds. Each has earned either a Zacks #1 Rank (Strong Buy) or a Zacks #2 Rank (Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all technology funds, investors can click here to see the complete list of funds.
Columbia Seligman Global Technology Fund A (MUTF:SHGTX) invests a lion's share of its assets in equities of technology companies located throughout the globe. SHGTX invests across a wide range of countries. SHGTX invests a minimum of 40% of its assets in foreign companies that are not traded in the U.S. The Columbia Seligman Global Technology A fund is non-diversified and has a three-year annualized return of 24%.
As of April 2015, SHGTX held 64 issues with 7.94% invested in Lam Research Corp.
Fidelity Select Technology Portfolio (MUTF:FSPTX) seeks capital growth over the long run. FSPTX invests a large chunk of its assets in common stocks of companies primarily involved in production, development and sale of products used for technological advancement. FSPTX invests in both U.S. and non-U.S. companies. Factors, including financial strength and economic condition, are considered before investing in a company. The Fidelity Select Technology Portfolio fund is non-diversified and has a three-year annualized return of 21.5%.
Charlie Chai is the fund manager and has managed FSPTX since 2007.
T. Rowe Price Science & Technology Fund (MUTF:PRSCX) invests a major portion of its assets in companies that are believed to gain from development and advancement of science or technology. Though PRSCX primarily focuses on acquiring common stocks of domestic companies, it may also invest in non-U.S. companies. The T. Rowe Price Science & Technology Fund has a three-year annualized return of 24.1%.
PRSCX has an expense ratio of 0.84% as compared to category average of 1.50%.
Black Oak Emerging Technology Fund (MUTF:BOGSX) seeks long-term capital appreciation. BOGSX invests majority of its assets in equity securities of emerging companies from the technology sector. BOGSX invests in common stocks of companies that are believed to outperform others in its domain. The Black Oak Emerging Technology fund has a three-year annualized return of 21.6%.
Robert D. Stimpson is the fund manager and has managed BOGSX since 2006.
Franklin DynaTech Fund A (MUTF:FKDNX) invests in companies that are believed to have strong fundamentals and benefit from advancement of technologies. FKDNX invests in companies all over the globe irrespective of market capitalization size. The Franklin DynaTech Fund has a three-year annualized return of 21.1%.
As of March 2015, FKDNX held 109 issues with 2.70% invested in Facebook Inc. (NASDAQ:FB) Class A.