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5 Mutual Funds That Focus On Technology Stocks In 2023

Technology funds usually invest in equities of technology companies. This blog covers Top 5 Mutual Funds That Focus on Technology Stocks in 2023.
April 18, 2024

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Mutual Funds which invest predominantly in technology companies are also popularly known as technology funds. They can invest in both debt and equities of these companies. They usually try to bet on new emerging technologies which are likely to disrupt the tech world with new innovations. ICICI Prudential Technology Fund, SBI IT Funds and Aditya Birla Sun Life New Millennium Fund are examples of some prominent Indian technology funds. Most of the companies in these funds operate in the domain of solving complex business challenges with breakthrough technical innovations. These include IT, digital transformation, data analytics, Artificial Intelligence and Machine Learning. Technology funds in India have consistently provided a good annualized return over years. With a decent return, these can serve as a good diversification option for investors looking to cash in on the ever-growing technology sector in the country. 

Below mentioned are some funds that focus mainly on technology stocks. However, we at Cube Wealth suggest you consult a financial advisor or a Cube Wealth Coach before investing in any assets because entry and exit points are crucial for any sectoral fund and technology funds are no different. So it's important to ensure u have the necessary knowledge to execute and time them. You may also see a Cube Wealth Coach or download the Cube Wealth app to effectively implement these tactics and accomplish long-term financial objectives.

1. SBI Technology Opportunities Fund- Direct Fund Growth

SBI Technology Opportunities Fund - Direct Plan is Open-ended Sectoral-Technology Equity scheme which belongs to SBI Mutual Fund House. The investment objective of the fund is that " The scheme seeks to provide the investor with the opportunity of long-term capital appreciation by investing in a diversified portfolio of equity and equity related securities in technology and technology related companies.

  • Risk: High
  • 1-Year Returns: -17.1%
  • 3-Year Returns: 37.3%
  • 5-Year Returns: 19.9%
  • AUM: ₹2,861.77 crores

2. ICICI Prudential Technology Fund

ICICI Prudential Technology Fund is Open-ended Sectoral-Technology Equity scheme which belongs to ICICI Prudential Mutual Fund House. The investment objective of the fund is that the scheme will seek long term capital appreciation by investing in equity and equity related securities of technology and technology dependent companies. A large share of the AUM will be invested in the stocks under the Benchmark Index, however, the scheme may also invest in other companies which form a part of the Information Technology Services Industry. 

  • Risk: High
  • 1-Year Returns: -17.1%
  • 3-Year Returns: 37.3%
  • 5-Year Returns: 19.9%
  • AUM: ₹8,993.09 crores

3. Franklin India Technology Fund

Franklin India Technology Fund is Open-ended Sectoral-Technology Equity scheme which belongs to Franklin Templeton Mutual Fund House. The investment objective of the fund is that the scheme seeks above normal capital appreciation through investments in high quality, fast growing companies in the information technology sector. The Fund will Follow a bottom-up approach to stock pricing.

  • Risk: High
  • 1-Year Returns: -17.1%
  • 3-Year Returns: 37.3%
  • 5-Year Returns: 19.9%
  • AUM: ₹712.41 Crores

4. Tata Digital India Fund

Tata Digital India Fund - Direct Plan is Open-ended Sectoral-Technology Equity scheme which belongs to Tata Mutual Fund House. The investment objective of the fund is that the scheme seeks long term capital appreciation by investing at least 80% of its net assets in equity/equity related instruments of the companies in the Information Technology Sector in India.

  • Risk: High
  • 1-Year Returns: -17.1%
  • 3-Year Returns: 37.3%
  • 5-Year Returns: 19.9%
  • AUM: ₹6,765.81 Crores

5. Aditya Birla Sun Life Digital India Fund

Aditya Birla Sun Life Digital India Fund is Open-ended Sectoral-Technology Equity scheme which belongs to Birla Sun Life Mutual Fund House. The investment objective of the fund is that the fund seeks capital growth, with a secondary objective of income generation with focus on technology and technology dependent companies. The scheme will follow a bottom-up approach to stock picking, adopting a blend of value and growth style of investing.

  • Risk: High
  • 1-Year Returns: -17.1%
  • 3-Year Returns: 37.3%
  • 5-Year Returns: 19.9%
  • AUM: ₹3,338.13 Crores

You may download the Cube Wealth App to start Investing today or also consult to a Cube Wealth Coach before investing in any such vehicle. 

FAQs

1. Which is the best technology mutual fund?

Ans.  Technology Funds have the main objective to outperform equity funds by staying invested in the Technology sector as it is one of the growing industries. All Sectoral Funds have the prime agenda to outdo diversified funds if fund corpus is invested in a specific sector which is expected to grow in recent years. There are numerous funds that are outperforming in the technology sector but ICICI prudential technology fund is one of the prominent funds that is growing in the market. The fund has 94.92% investment in domestic equities of which 78.39% is in Large Cap stocks, 5.84% is in Mid Cap stocks, 6.36% in Small Cap stocks.The fund has 1.15% investment in Debt, of which 1.16% in Government securities.

2. Are technology mutual funds a good investment?

Ans. According to mutual fund advisors, many investors started investing in IT funds in the last two to three years. IT schemes got a major boost in the covid years as the transition to online mode by the world was supposed to help IT companies rake in the money. To be fair, IT sector schemes indeed have helped investors to create wealth over a long period of time. For example, the category generated 19.53% in 10 years. Before adopting any investment strategy, it's advisable to download the Cube Wealth app and consult a Cube Wealth Coach who can provide guidance based on your risk tolerance.

3. Which mutual funds invest in TCS?

Ans. TCS is one of the prominent names when it comes to the stock market and shares. Some main mutual funds that invest in TCS are:

  1. ABSL Arbitrage Fund (G)
  2. Axis Arbitrage Fund-DP (G)
  3. DSP Arbitrage Fund - Direct (G)
  4. HDFC Index - Nifty 50 Plan
  5. HSBC Arbitrage Fund - DP - (G)
  6. ICICI Pru Balanced Adv (G)
  7. Kotak Balanced Advantage - Dir. (G)
  8. Kotak Nifty ETF
  9. L&T Conservative Hybrid Fund - DP - (G)
  10. Mirae Asset ESG Sector Leaders ETF - RP

4. What is the best technology index fund?

Ans. Though there are many technology index funds in the market to invest, Axis NIFTY IT ETF is one of the top performing index funds. Axis NIFTY IT ETF is Open-ended Sectoral-Technology Equity scheme which belongs to Axis Mutual Fund House. The scheme's objective is to seek long-term capital appreciation by investing in equity and equity-related securities of technology and technology-dependent companies. Its trailing returns over the period of 5yrs is 22.69%.

Conclusion

In 2023, technology continues to be at the forefront of innovation and growth, and investors seeking exposure to this dynamic sector have a range of mutual funds to consider. The five mutual funds highlighted here, each focusing on technology stocks, provide opportunities to tap into the potential of companies driving the digital revolution. As with any investment, it's crucial to carefully assess your financial goals, risk tolerance, and investment horizon before selecting the right fund for your portfolio. Technology-driven mutual funds can offer the potential for capital appreciation, but prudent research and due diligence are essential in navigating the ever-evolving landscape of tech investments.

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