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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 — 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. 

T. Rowe Price Global Technology Fund (PRGTX Quick Quote PRGTX - Free Report) aims for long-term capital growth. This non-diversified fund invests most assets in the common stocks of companies that its managers expect will generate a majority of their revenues from the development, advancement, and use of technology. It usually invests in a minimum of five countries and invests about one-fourth of its assets in non-U.S. companies. PRGTX has three-year annualized returns of 33.9%.

PRGTX has an expense ratio of 0.86% compared with the category average of 1.05%.

Fidelity Select Software & IT Services Portfolio (FSCSX Quick Quote 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 27.3%.

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

BlackRock Technology Opportunities Fund Investor A Shares (BGSAX Quick Quote BGSAX - Free Report) aims for long-term capital appreciation. The fund invests the majority of assets in equity securities issued by domestic as well as foreign technology companies across all market capitalization ranges. Such companies are selected primarily for their rapid and sustainable growth potential from the development, advancement and use of technology. BGSAX has three-year annualized returns of 34.6%.

As of the end of August 2021, BGSAX held 137 issues with 4.14% of its assets invested in Apple Inc.