Are technology funds suitable investments – Technology has been the star sector of stock markets in recent years. Many funds in the category accumulate annualized earnings of more than 30% over three years, which means more than doubling the investment over this period, and 20% annualized over ten years, which is truly outrageous.
The tremendous technological boom only seems to have slowed down in recent weeks, when investors seem to have cashed in. The Nasdaq has lost 1,000 points from its highs and top-rated stocks in the sector, such as Tesla or Netflix, are down more than 20% and 15%, respectively, from their peak.
Will these declines be the start of a more severe correction? Or, are we facing an excellent opportunity to get on the train that has run the most in recent years in the stock markets?
For those who think the latter, today we share a selection of the five funds in the sector that have the best ratings from advisers at Finest, a poker of products that are also among the most requested by investors on the platform.
An annualized return of almost 40% includes this fund from the manager JPMorgan AM, which has the large American companies in the sector in its portfolio but also takes specific positions in companies where they see more attractiveness, such as semiconductors or the Internet in recent months.
Advisors usually give it the highest rating, five stars, in the reviews they leave about the product on their Finest file. Thus, Manuel Sánchez, financial advisor to Mapfre, highlights that it is an exciting product to “invest in high-quality technological actions with long-lasting and sustainable franchises, and that have increased their market share”. At the same time, Joaquín Escola also leaves it clear: “It is a fund that cannot be missing from my investment portfolio”.
Another of the most popular funds, something to which its historical profitability contributes decisively: it earned more than 38% annualized in the last three years, taking advantage of the boom that this disruptive technology based on big data, “one of the sectors on the rise in the recent years and with great prospects for the future”, explains Ivan Hostert, from Inversimply.
Advisors highlight its quality. Miguel Camiña, a partner at Capital, “it is surely the best fund in the category to invest in artificial intelligence “, and Daniel Pérez, a selector at Kau Markets, describes it as “a great option to take advantage of the impact of artificial intelligence in the world”. “It accumulates a historical return well above the index by investing in all types of companies that benefit from artificial intelligence (AI),” he adds.
The American manager has another of the most acclaimed funds among professionals to invest in fixed income. And its profitability does not disappoint: in 2021, it was one of the best funds in the sector, with a profit of 30%, and after three years, it obtained an annualized return of more than 30%. What do the professionals stand out?
“One of the technology funds that has best withstood falls because it not only invests in leading companies, but it is a fund that bets on those companies with better fundamentals and less debt,” explains Mar Barrero, director of analysis at Archie Profit. Due to these characteristics, as she explains, “it would be affected to a lesser extent if there is a rebound in rates.”
For Guillermo Villar, advisor to Inversimply, “it can be a great option if we want to put together a portfolio that includes technology”. However, yes, he clarifies, “we have to be clear that the sector does not have exactly low volatility” and that the positions in the portfolio should be balanced with other funds according to the risk profile of each investor.
Although 2021 is not so bright, it makes an annualized profit of 40% in three years and almost 25% in ten years. “Impressive figures that show the growth of the sector in the last decade”, as explained by Manuel Sánchez, a financial adviser at Mapfre, who classifies it as “an indispensable part of the technology sector”.
An opinion widely shared among advisors, as can be seen in the reviews on Finest, which highlight it as “a superior fund in many aspects, guided by a great manager with a solid track record” or “which is perfect for anyone who wants to invest in the sector”, as can be read in its file.
BlackRock also has another technology fund that investors and analysts increasingly follow, the BGF Next Generation Technology Fund, with even more profitability over three years, above 40% annualized, with a less spectacular 2021.
“One of the best options for investing in big data “, in the opinion of Eduardo Estallo, a financial advisor at Mapfre Inversión. Now, a commitment to technology is something special because it does not invest only in technology but in any company that benefits from the application of big data in its business.
It is among the most outstanding of 2021, with a gain of more than 26%. After three years, it has added more than 20% annualized, “some fascinating metrics that show that it is a high-quality fund”, in the opinion of Estilo.
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