When it comes to investment, many businesses have seasonal patterns. for example, in the technology industry, there is usually a boost in business later in the year. Why? Well, this is generally when customers determine their capital budgets and big businesses make big technology investments.
And research from Adviser Investments bears this out. According to the firm’s analysis, tech stocks have usually outperformed the general market from November to February (this is based on data for the past 26 years). Of course, the past four months was certainly another example of this. So far for those investors who have tech mutual funds, it’s been a nice ride.
OK, what are some of the top technology funds? Here’s a look at 5:
Allianz RCM Technology (RAGTX)
The Allianz RCM Technology (MUTF: RAGTX) fund definitely has experienced managers. Huachen Chen and Walter Price have been at the helm of the operation since the mid 1990s. in other words, they’ve navigated some of the biggest trends in tech, including the dot-com boom and bust.
And lately, the Allianz RCM fund has been sizzling. for the past year, it is up 40.03%.
To get these returns, the fund will invest in early-stage companies. some examples include SuccessFactors (NASDAQ: SFSF), Qlik Technologies (NASDAQ: QLIK) and Riverbed (NASDAQ: RVBD). These are in hot categories like cloud computing and virtualization.
Interestingly enough, the fund will periodically short companies, which can help to lower the risk levels of the portfolio. Besides, in the frothy tech sector, there are often companies that will eventually plunge.
Fidelity Select Electronics Portfolio (FSELX)
The Fidelity Select Electronics Portfolio (MUTF: FSELX) mutual fund, which has about $1.3 billion in assets, tends to focus on large tech companies. Its top holdings include Oracle (NASDAQ: ORCL), Microsoft (NASDAQ: MSFT), Google (Nasdaq: GOOG), IBM (NYSE: IBM) and CA, inc. (NYSE: CA).
All in all, the Select fund has been relatively consistent (at least compared to other tech funds). over the past five years, the average annual return was 11.71%. the expense ratio is also a reasonable 0.89% and the turnover is at only 56%.