4 Top-Performing Tech Funds of 2019
The U.S. technology sector clearly outpaced other S&P 500 sectors in 2019, thanks to new trends and advancements. Although the sector encountered volatility because of the rather long U.S.-China tariffs war and a slowdown in global economic growth around the first half of the year, the sector managed to recover later on.
A major reason behind the recovery was the reconciliation on the trade front between the United States and China in the fourth quarter. The result is evident in the striking fourth-quarter 2019 earnings reports of technology giants reported so far. This is why the sector is ideal for investments at present.
Technology Becomes Top-Gaining Sector of 2019
The Technology Select Sector SPDR Fund’s (XLK) 47.9% growth in 2019 was instrumental in pushing the overall returns of the broader S&P 500. Most of this growth is attributed to the second half of 2019, when the United States and China made significant progress in trade talks before zeroing in on an initial trade agreement.
However, trade-related progress wasn’t the only reason behind the technology sector’s remarkable performance last year. Significant development in 5G networks, implementation of new technologies in defense projects, and implementation of AI and machine learning technologies to automate industrial production across the country also boosted the sector.
In addition, the low-rate environment created by the Federal Reserve last year through three interest rate cuts also aided technology companies to an extent. The central bank cut interest rates in July, September and October. The current benchmark rates are in the range of 1.5 to 1.75%.
4 Best Technology Mutual Funds
We have, therefore, selected four technology mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy) and were some of the top performing funds last year. In addition, the minimum initial investment for these funds is within $5,000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Semiconductors Portfolio (FSELX) aims for capital growth. The fund invests the majority of its assets in securities of companies primarily engaged in the design, manufacture or sale of semiconductors and semiconductor equipment. The non-diversified fund invests in U.S. and non-U.S. companies alike.
This Zacks sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSELX has an annual expense ratio of 0.73%, which is below the category average of 1.30%. It has returned 64.5% over a year. The fund has no minimum initial investment.
Fidelity Advisor Technology Fund Class A (FADTX) invests the majority of its assets in securities of companies mostly engaged in activities in the technology sector. FADTX, which is a non-diversified fund, usually invests in common stocks of companies that are well positioned to considerably benefit from technological advances and improvements. The fund invests in U.S. and foreign stocks alike.
This Zacks sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FADTX has an annual expense ratio of 1.03%, which is below the category average of 1.30%. It has returned 50.5% over a year. The fund has no minimum initial investment.
Putnam Global Technology Fund Class A (PGTAX) is a non-diversified fund that seeks capital appreciation. The fund primarily invests in common stocks of large- and medium-capitalization companies that the fund manager believes has good investment potential. These companies are mostly engaged in various activities in the technology sector.
This Zacks sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PGTAX has an annual expense ratio of 1.16%, which is below the category average of 1.30%. It has returned 47.2% over a year and has minimum initial investment of $500.
Janus Henderson Global Technology Fund Class A (JATAX) aims for capital growth. The fund invests the majority of its assets in securities of companies that its managers believe will gain from the advancements in technology. JATAX invests in securities of both U.S. and foreign companies.
This Zacks sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
JATAX has an annual expense ratio of 1.00%, which is below the category average of 1.30%. It has returned 44.9% over a year and has a minimum initial investment of $2500.
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 >>
Click to get this free report Get Your Free (FSELX): Fund Analysis Report Get Your Free (PGTAX): Fund Analysis Report Get Your Free (JATAX): Fund Analysis Report Get Your Free (FADTX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
