The technology sector continues to grow at a rapid pace even with the all of the major markets at or near record levels. But the question arises, is there still room for growth for the remainder of 2017 and beyond? The answer is YES.
Technology companies have posted solid earnings for the second quarter with the S&P 500 technology sector posting +16.5% year over year earnings growth. These positive earnings numbers combined with solid valuations give the sector strong upside growth opportunities. Moreover, low unemployment, an improving jobs picture, and international expansion act as further tailwinds for the sector.
This positive sentiment will help mutual funds that are overweighed in the technology sector produce outsized gains over the next several quarters. We have identified four such funds that are well positioned to take advantage of the tech surge.
When looking for the best mutual funds, we need a method for narrowing down the universe of potential mutual fund options. This is easily accomplished by utilizing the Zacks Mutual Fund Screener; this tool enables the investor to filter out 60 different categories, and narrow down the scope of mutual fund options. For this writing we utilized 4 of the larger filters, Mutual Fund Rank = 1, Expense Ratio <= 1.1, % Stocks > 65%, and % Technology > 65%. These filters produced 7 funds, and from that list we chose the top 4. We wanted to find the top ranked funds with low expense ratios that are heavily weighted in technology stocks.
Please note, that there will be references to load fees, and expense ratios; if you click on the hyperlinks you will be directed to a brief article explaining in detail what those fees and expenses are, and how they impact your mutual fund returns.