Top 5 Technology Mutual Funds (Feb. 2011)

Technology is poised to follow a new growth path this year and recent earnings figures clearly point in this direction. Results from Qualcomm and Netflix indicate that a new breed of mobile and internet-based devices is poised to replace the humble personal computer. Meanwhile, cloud computing companies have also become hot favorites in this domain as investors expect an encore of the performance they returned last year. Systematic research and widely diversified portfolios make technology funds the best bet for investments in this sector.

Below we will share with you 5 top rated technology mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future.

Invesco Technology Investor (FTCHX) invests primarily in companies which leverage technology in product development or operations. The fund focuses in acquiring common stocks and more than half of its assets may be utilized to purchase foreign securities. The technology mutual fund returned 20.88% in the last one year period.

The technology mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.65% compared to a category average of 1.74%.

Dreyfus Technology Growth A (DTGRX) seeks capital appreciation. At least 80% of the fund’s assets are invested in companies who are producers in the technology sector or seeking to benefit from advances in this domain. The technology mutual fund has a three year annualized return of 5.06%.

As of November 2010, this technology mutual fund held 34 issues, with 5.22% of its total assets invested in Apple, Inc.

Northern Technology (NTCHX) invests heavily in securities of companies whose primary operations are related to technology. The fund invests in excess of 25% of its total assets in firms in the computers business, including hardware, software and components. The technology mutual fund returned 24.09% in the last one year period.

The fund manager is Deborah Koch and she has managed this technology mutual fund since 2004.

RS Technology A (RSIFX) seeks capital growth over the long term. The fund invests a large share of its assets in equity securities of technology companies. It concentrates on purchasing securities of small and mid-cap companies. The fund invests heavily in domestic companies but may also purchase foreign securities. The technology mutual fund has a five year annualized return of 9.14%.

The technology mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.60% compared to a category average of 1.74%.

DWS Technology A (KTCAX) invests the majority of its assets in common stocks of companies in the technology domain. The fund invests in companies regardless of their size or market capitalization. Not more than 35% of its assets are utilized to purchase foreign securities. The technology mutual fund returned 18.28% in the last one year period.

The fund manager is Clark Chang and he has managed this technology mutual fund since 2008.

To view the Zacks Rank and past performance of all technology mutual funds, then click here.

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