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 greater demand for technology and innovation. Improving industry fundamentals and emerging technologies, such as wearables, VR headsets, drones, virtual reality devices and 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 has come to assume a broader meaning than just hardware and software companies. Social media and Internet companies are now part of the technology landscape.

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.

Red Oak Technology Select Fund (ROGSX - Free Report) seeks long-term capital appreciation. The fund invests the majority of its assets in equity securities of companies operating in the technology sector. Although the fund mostly invests in common stocks of U.S. companies, it may also invest in securities of foreign issuers and American Depositary Receipts that satisfy the fund’s investment criteria. ROGSX has returned 23.2% in a year.

As of December 2019, ROGSX held 34 issues with 6.61% of its assets invested in Microsoft Corp.

Putnam Global Technology Fund Class A (PGTAX - Free Report) aims for capital growth. The fund mostly invests in common stocks of medium- and large-capitalization companies that operate in the technology sector. This is a non-diversified fund. PGTAX has returned 39.6% in a year.

PGTAX has an expense ratio of 1.16% as compared to the category average of 1.29%.

T. Rowe Price Communications & Technology Fund Investor Class (PRMTX - Free Report) seeks to provide capital growth over a long period. The fund invests the majority of its assets in securities of communications and technology companies. The non-diversified fund invests in securities of U.S. and non-U.S. issuers alike. PRMTX has returned 23.2% in a year.

Paul D. Greene is the fund manager of PRMTX since 2013.