3 Tech Funds to Boost Your Portfolio on the Ongoing Nasdaq Rally
Wall Street has been on a rally since the Federal Reserve last month announced its first interest rate cut in more than four years. Although markets have turned somewhat volatile over the past week on concerns over the economy’s health, major indexes have been steadily climbing.
The recent rally is being driven by tech stocks, much like most of this year and 2023. On Friday, the tech-heavy Nasdaq hit a new closing high, driven by mega-cap tech stocks ahead of their earnings reports.
Given the ongoing tech rally and expectations for more interest rate cuts this year, investing in tech funds like Fidelity Select Semiconductors Portfolio FSELX, T. Rowe Price Science & Tech PRSCX and Janus Henderson Global Technology and Innovation Fund JNGTX could be a wise decision.
On Friday, the Nasdaq rose by 0.6%, closing at an all-time high of 18,518.61 points. On Monday, the tech-heavy index extended its gains, closing up 0.3% at 18,567.19 points. Also, the Nasdaq ended last week 0.2% higher, marking its seventh consecutive week of gains, its longest winning streak of 2024. Year to date, the Nasdaq has gained 23.7%, after rising 43.4% in 2023, its best performance since 2020.
The tech rally, this year, is being driven by the ongoing enthusiasm surrounding artificial intelligence (AI), especially generative AI, which is helping the broader market. While experts have mixed views on the future of generative AI, there is significant optimism about its potential. NVIDIA Corporation (NVDA) has been leading from the front in this area, with several tech giants fast trying to explore this area and catch up.
The Federal Reserve’s recent 50 basis points interest rate cut in September has also lately been helping growth assets like tech stocks. With expectations for two more rate cuts of 25 basis points each this year, tech stocks are likely to benefit further.
As a result, we’ve chosen three funds from the tech sector that are worth buying. These funds have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Semiconductors Portfolio fund seeks capital appreciation. FSELX normally invests at least 80% of its assets in common stocks of companies principally engaged in the design, manufacture, or sale of electronic components (semiconductors, connectors, printed circuit boards and other components); equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Select Semiconductors Portfolio fund has a track of positive total returns for over 10 years. Specifically, FSELX’s returns over the three and five-year benchmarks are 28.2% and 35.2%, respectively. FSELX has a Zacks Mutual Fund Rank #1 and its annual expense ratio is 0.67%, which is lower than the category average of 1.25%.
To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.
T. Rowe Price Science & Tech fund seeks to invest in long-term capital growth by investing at least 80% of net assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement, and use of science and technology. While most of PRSCX’s assets are invested in U.S. common stocks, other securities may also be purchased, including foreign stocks, futures, and options, in keeping with the fund’s objectives.
T. Rowe Price Science & Tech has a track of positive total returns for over 10 years. Specifically, PRSCX returns over the three and five-year benchmarks are 7.6% and 17.4%, respectively. The annual expense ratio of 0.79% is lower than the category average of 1.05%. PRSCX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
Janus Henderson Global Technology and Innovation Fund aims for long-term growth of capital and specializes in technology. JNGTX invests the majority of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology.
Janus Henderson Global Technology and Innovation Fund has a track of positive total returns for over 10 years. Specifically, JNGTX’s returns over the three and five-year benchmarks are 8.9% and 20%, respectively. JNGTX has a Zacks Mutual Fund Rank #1. Its annual expense ratio is 0.78%, which is lower than the category average of 0.99%.
To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.
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