Artificial intelligence (AI) has gained immense popularity, thanks to its many crucial implementations in everything from daily life applications to complex technological problems. The industry has grown remarkably fast, with notable advancements in forms of AI such as machine learning, big data, and robotics.

Unrestrained Growth in AI to Push Tech

Several sectors in the United States have taken initiatives to implement AI applications for faster and intelligent processing, which not only simplify their tasks but also save time. Secondly, the ability of machine learning algorithms to study trends and data and improve themselves with least human intervention is the need of the hour. This is a major reason behind AI’s widespread application.

In addition, AI applications make it easier to track tasks in a world which is constantly changing and undergoing technological advancements. To be more specific, companies now have complex business models to assist in daily operations. They also have intricate manufacturing processes, packaging systems and supply chains that are difficult to track at human speed.

In fact, AI’s widespread implementations put it up for further growth. According to a Markets and Markets report, the AI market is expected to grow at a cumulative annual growth rate of 36.6% during the forecast period of 2018-2025. The market segment is expected to grow to $190.6 billion by 2025.

Let us thus take a look at a couple of mutual funds that invest in companies that are contributing significantly in the field of AI.

Our Choices

We have selected four mutual funds that could stand to gain from advancement in AI. All these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging year-to-date returns. Additionally, the minimum initial investment is less than $5000. We expect these funds to outperform their peers in the future.

Now we come to the most vital question: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds.

Fidelity Select Semiconductors Portfolio (FSELX - Free Report) fund aims for capital growth. The fund mostly invests in securities of companies that are engaged in various activities related to electronic products. The fund invests the majority of its assets in securities of these companies that design, manufacture, and market electronic components such as semiconductors, printed circuit boards, connectors, and other related components. Intel, Qualcomm, Broadcomm, and Nvidia are among the fund’s top 10 holdings.

This Zacks sector – Tech fund has a history of positive total returns for more than 10 years.

FSELX carries a Zacks Mutual Fund Rank #1. The fund has an annual expense ratio of 0.73%, which is below the category average of 1.29%. It has year-to-date returns of 27.4%. The fund has no minimum initial investment.

Putnam Global Technology Fund   (PGTAX - Free Report) seeks capital appreciation. The fund invests in technology companies all around the world. The fund invests in any industry within the technology sector that benefits from growing global demand, be it software, computers, internet services or storage. Microsoft, Alphabet and NXP Semiconductors are among the fund’s top 10 holdings.

This Zacks sector – Tech fund has a history of positive total returns for more than 10 years.

PGTAX carries a Zacks Mutual Fund Rank #2. The fund has an annual expense ratio of 1.15%, which is below the category average of 1.29%. It has year-to-date returns of 28.5%. The fund has a minimum initial investment of $500.

Franklin DynaTech Fund (FKDNX - Free Report) aims for capital appreciation. The company primarily invests in companies that management considers as leaders in innovation, which benefit from new technologies and a superior management among other factors. Microsoft, Alphabet, and Salesforce.com are among the fund’s top 10 holdings.

This Zacks sector – Tech fund has a history of positive total returns for more than 10 years.

FKDNX carries a Zacks Mutual Fund Rank #2. The fund has an annual expense ratio of 0.87%, which is below the category average of 1.07%. It has year-to-date returns of 30%. The fund has a minimum initial investment of $1000.

T. ROWE PRICE Global Technology Fund (PRGTX - Free Report) aims to offer capital growth over a long period of time. In order to do that, the fund invests most of its assets in common stocks of companies that expect to generate a major part of their revenue from advancement, development, and implementation of technology. The fund aims to invest in at least five countries and allocate a quarter of the fund’s assets in stocks of companies outside the United States, which may include companies in emerging markets. Netflix and Microchip Technology are among the fund’s top 10 holdings.

This Zacks sector – Tech fund has a history of positive total returns for more than 10 years.

PRGTX carries a Zacks Mutual Fund Rank #2. The fund has an annual expense ratio of 0.91%, which is below the category average of 1.29%. It has year-to-date returns of 24.7%. The fund has a minimum initial investment of $2500.