Technology has remained one of Wall Street’s biggest wealth creators over the past five years, fueled by advances in artificial intelligence (AI), cloud computing, cybersecurity and semiconductor innovation. While the sector has experienced periods of heightened volatility, investors who stayed invested in well-managed technology funds have been rewarded with exceptional long-term gains. Fidelity offers several sector-focused mutual funds that combine strong historical performance with favorable analyst ratings from Zacks, making them worth considering for investors seeking long-term capital appreciation.
Fidelity Advisor Semiconductors (FELAX – Free Report) currently carries a Zacks Mutual Fund Rank #1 (Strong Buy). The fund has generated an impressive 40.92% annualized return over the past five years, placing it among the top performers in the technology fund category. It primarily invests in companies involved in semiconductor design, manufacturing and equipment, benefiting from surging demand for AI chips, high-performance computing and data-center infrastructure.
Adam Benjamin has been the lead manager of FELAX since 2020. The three top holdings for FELAX are Nvidia (24.8%), Broadcom (10.6%) and Marvell Technology (7.7%). FELAX carries an expense ratio of 0.91%. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Another standout is Fidelity Select Tech Hardware (FDCPX – Free Report) , which also holds a Zacks Mutual Fund Rank #1. The fund has delivered a 26.20% annualized five-year return by focusing on software, hardware, networking and IT services companies. With leading holdings spread across enterprise technology and digital infrastructure, FDCPX has capitalized on businesses’ continued investment in cloud computing, cybersecurity and digital transformation initiatives.
Aidan Brandt has been the lead manager of FDCPX since 2024. The three top holdings for FDCPX are Cisco (10.8%), Western Digital (9.1%) and Samsung Electronics (8.8%). FDCPX carries an expense ratio of 0.67%.
Completing the list is Fidelity Select Semiconductors (FSELX – Free Report) , another fund with a Zacks Mutual Fund Rank #1. It boasts an outstanding 41.77% annualized return over the past five years, ranking near the top of its peer group. Like FELAX, this portfolio too is heavily invested in industry leaders, allowing investors to benefit from the explosive growth in AI, advanced chip manufacturing and next-generation computing technologies.
Adam Benjamin has been the lead manager of FSELX since 2020. The three top holdings for FSELX are Nvidia (24.1%), Broadcom (10.6%) and Marvell Technology (5.6%). FSELX carries an expense ratio of 0.60%.
Although technology funds can be more volatile than diversified equity portfolios, their long-term performance highlights the strength of secular trends reshaping the global economy. With Zacks Mutual Fund Rank #1 ratings and outstanding five-year annualized returns, FELAX, FDCPX and FSELX stand out as compelling choices for investors looking to capitalize on the continued expansion of the technology sector.
Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
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