More On Legal & Compliancefrom The Advisor's Professional Library
- The New and Improved Form ADV Whether an RIA is describing its investment strategy in advertisements or in the new Form ADV Part 2, it is important the firm articulates material risks faced by advisory clients and avoids language that might be construed as a guarantee.
- Conducting Due Diligence of Sub-Advisors and Third-Party Advisors Engaging in due-diligence of sub-advisors isnt just a recommended best practice it is part of the fiduciary obligation to a client. An RIA should be extremely reluctant to enter a relationship with a sub-advisor who claims the firms strategy is proprietary.
What’s up with tech? It’s easily the question of the decade (century?) as the sector continues to dominate investors, headlines and, too often it seems, our entire lives. New gadgets here, new build-outs there, software, Moore’s Law, tablets, digital divides; the risks and opportunities are great.
So how does the average investor win? Zacks Investment Research helpfully lists the top performing technology mutual funds.
“Technology is clearly a long-term growth prospect for investors willing to remain invested and should continue to outperform the market over time,” according to Zacks. “Many have viewed the sector with skepticism since the tech bubble burst more than a decade ago, but times have clearly changed for the better. Valuations are now based on stronger fundamentals and careful selection of investments has yielded good long term returns for many funds. Technology mutual funds greatly reduce the volatility inherent in this sector through by carefully selecting securities to create widely diversified portfolios.”
Here are the best performers, which have all earned a Zacks No. 1 Rank (strong buy) as the firm expects these mutual funds to outperform their peers in the future.
(See other Top 10 lists by AdvisorOne.)
Goldman Sachs Technology Tollkeeper A (GITAX) seeks long-term capital appreciation, according to Zacks. At least 80% of its assets are invested in equity securities of “toll keeper” companies, which are companies that are positioned to benefit from the proliferation of technology. The technology mutual fund has a 10-year annualized return of 4.05%.
RS Technology A (RSIFX) invests a large share of its assets in equity securities of technology companies, the research firm reports.
“It concentrates on purchasing securities of small- and mid-cap companies. The fund invests heavily in domestic companies but may also purchase foreign securities. The technology mutual fund has a five year annualized return of 5.68%.”
MFS Technology A (MTCAX) seeks capital growth. The fund, from the company that claims the very first mutual fund, “invests the majority of its assets in companies whose businesses gain from advancements in the technology domain. Domestic and foreign stocks, including emerging market securities constitute its major investments. The technology mutual fund returned 9.52% in the last one year period.”
Fidelity Select Software and Computer Services (FSCSX) “invests a large share of its assets in companies whose principal operations are related to software or information-based services,” Zacks writes. “The fund may purchase foreign securities and invest a heavily in a single issuer. The technology mutual fund has a three-year annualized return of 26.34%.”
Vanguard Information Technology Index (VITAX) seeks to mimic the performance of the MSCI US Investable Market Information Technology 25/50 Index.
“The fund invests almost all its assets in equity securities which are included in the index. The technology mutual fund returned 7.46% in the last one year period,” Zacks concludes.
Top 10 lists from AdvisorOne: