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Risk lovers seeking healthy returns over a fairly long investment horizon may opt for technology mutual funds. It is believed that the technology sector is poised for a brighter earnings performance than others owing to innovation and greater demand. Improving industry fundamentals and emerging technologies — such as wearables, VR headsets, drones, virtual reality devices and artificial intelligence (AI) — are the key catalysts for the sector.

Meanwhile, most mutual funds investing in securities from these sectors prefer a growth-oriented approach that includes focusing on companies with strong fundamentals and a relatively higher investment prospect. Moreover, technology now has broader coverage than just hardware and software companies. Social media and Internet companies are also part of the technology landscape today.

Below we share with you three top-ranked technology mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future.

Fidelity Select Computers Portfolio (FDCPX - Free Report) aims for capital appreciation. This non-diversified fund invests the majority of assets in securities of companies primarily engaged in research, design, development, manufacture or distribution of products and services related to currently available or experimental hardware technology in the computer industry. FDCPX has three-year annualized returns of nearly 26%.

As of the end of May 2021, FDCPX held 36 issues with 15.14% of its assets invested in Samsung Electronics Co Ltd.

T. Rowe Price Science and Technology Fund (PRSCX - Free Report) aims for long-term capital appreciation. This non-diversified fund invests in common stocks of companies expected to benefit from the development and use of science and/or technology. It may invest in foreign stocks, including issuers in emerging markets. PRSCX has three-year annualized returns of 27.2%.

PRSCX has an expense ratio of 0.77% compared with the category average of 1.05%.

Fidelity Select Software & IT Services Portfolio (FSCSX - Free Report) aims for capital appreciation. The non-diversified fund invests the majority of its assets in common stocks of companies engaged in research, design, production, or distribution of products or processes that relate to software or information-based services. FSCSX has three-year annualized returns of 27.8%.

Ali Khan is one the fund managers of FSCSX since 2014.