4 Technology Mutual Funds for 2021

The tech sector took a beating during parts of last year, highlighted by a 19% stock price drop in a single day for Meta (FB), formerly Facebook, and its $120 billion loss over the course of a single week. Just days prior, Netflix (NFLX) reported weaker quarterly results and a grim outlook for subscribers.

These stories have exacerbated investor concerns about a continuing sector-wide slowdown in the technology space, especially after 2017’s 30% rally, which provoked lingering fears of an impending drop-off. Tech stocks again stayed buoyant, rising through 2018 and 2019 and remaining firm during the COVID-19 selloff in the Spring of 2020. This can lead to investor jitters that the sector is overheated.

Instead of divesting from tech stocks completely, investors may limit their downside risk by cultivating a well-diversified exposure to tech plays, via technology mutual funds. Here are four of the best performers:

(All figures are current as of December 2021)

1. Fidelity Select IT Services Portfolio (FBSOX)

• Issuer: Fidelity
• Assets under management: $3.6 billion
• Expense ratio: 0.72%
• YTD performance: -4.75%

FBSOX is one of the largest and oldest of the technology mutual funds. Over the life of the fund (inception date February 1998), it has delivered average annualized returns exceeding 13%. The fund’s objective is capital appreciation, and it invests at least 80% of its assets in companies providing IT services. The mutual fund is relatively concentrated, although there are 54 equities in the fund’s portfolio, the top 10 holdings account for 69.95% of the assets. About 92.55% of the equities are domestic, with the remainder in international emerging markets.

The turnover rate is low at 30%. The fund has delivered one-, three-, and five-year annualized returns at 2.05%,18.36%, and 20.64%, respectively.

2. Red Oak Technology Select Fund (ROGSX)

• Issuer: Oak Associates Funds
• Assets under management: $659.49 million
• Expense ratio: 0.94%
• YTD performance: 18.29%

ROGSX is a long-term growth fund that bases stock picks on fundamentals without regard to market cap. There are just 26 holdings in the fund’s portfolio, with the top 10 equities accounting for just 60.15% of its assets. You’ll see household names like Alphabet (GOOG) and Amazon (AMZN), as well as somewhat lesser-known equities like KLA- Tencor Corp. (KLAC) powering the fund solid returns.

Since its inception in 1998, the fund has delivered returns of nearly -0.59%, with one-, three-, and five-year annualized returns of 26.64%, 18.31%, and 21.81%, respectively.

3. T. Rowe Price Global Technology Fund (PRGTX)

• Issuer: T. Rowe Price
• Assets under management: $10.2 billion
• Expense ratio: 0.86%
• YTD performance: 15.59%

This is an aggressive growth fund for investors seeking long-term capital growth. Turnover is brisk at 82.8%, as you’d expect from an aggressively managed fund. Since its inception in 2000, the fund has consistently outperformed the MCSI All Country World Index IT for global technology funds.

One-, three-, and five-year average annual returns are 39.64%, 34.75%, and 28.08%, respectively. There is a $2,000 minimum investment required, and a charge of $100 to add to an account.

4. Columbia Seligman Global Technology Fund (SHGTX)

• Issuer: Columbia Threadneedle Investments
• Assets under management: $2.1 billion
• Expense ratio: 1.31%
• YTD performance: 30.45%

SHGTX is another aggressive growth fund and compared with the MCSI World Index IT Index Net, its portfolio is heavily concentrated in semiconductors (48.5% vs. 15%) and short on IT (6% vs. 17%). However, SHGTX has consistently outperformed the index by between 5% and 10% over the past three years.

One-, three-, and five-year annualized returns are 39.02%, 38.37%, 30.25%, respectively. The fund requires a $2,000 minimum investment.

View Article Origin Here