3 Technology Mutual Funds to Consider Amid AI-Driven Volatility

Over the past year, mutual funds with a technology focus on Wall Street have reflected the broader narrative of the U.S. tech sector, strong long-term drivers tempered by short-term volatility and rotation in investor sentiment. For much of 2025, the technology sector continued to be a key engine of equity market performance, with indices tracking technology and communication services delivering returns that outpaced the broader S&P 500 as AI investment and digital transformation spending gained traction.Despite this backdrop of underlying strength, tech-focused mutual funds experienced a mixed performance profile through the year. Many funds underperformed relative to broad equity averages as valuation pressures, geopolitical uncertainty and profit realization concerns weighed on stock prices in key subsectors like software. This dynamic was most pronounced during episodes of market stress, such as tariff-related sell-offs and episodic pullbacks in major tech names that highlighted the sector’s sensitivity to macro headlines. While diversified U.S. stock funds generated solid double-digit gains in 2025 overall, tech-oriented strategies lagged at times.Entering 2026, the current light on tech sector mutual funds is one of cautious optimism. The State Street Technology Select Sector SPDR ETF (XLK) has advanced 3.7% since the year started. The macroeconomic backdrop that includes expectations of continued AI-led earnings growth underpins a positive medium-term outlook, even as short-term volatility persists and leadership within the sector fluctuates. Valuations for some technology stocks have become more attractive after earlier corrections, potentially offering entry points for long-horizon investors. However, the sector’s inherent cyclicality and heavy concentration in a few megacaps remain key considerations for mutual funds focused on technology themes.Astute investors, thus, may look to invest in technology mutual funds at present. 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).We have thus selected three such technology mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio.Columbia Global Technology Growth CMTFX invests primarily in equity securities of technology companies, focusing on businesses that benefit from technological advancements and operate mainly within technology and related industries.Rahul Narang has been the lead manager of CMTFX since July 2012. Three major holdings for the fund are 16.1% in NVIDIA, 9.1% in Microsoft and 8.3% in Broadcom.CMTFX’s 3-year and 5-year annualized returns are 37.2% and 15.8%, respectively. Its net expense ratio is 0.91%. CMTFX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.Franklin DynaTech FKDNX invests mainly in common stocks of innovative global companies with strong management, across sectors and market sizes, benefiting from new technologies and evolving industry conditions.Rupert H. Johnson Jr. has been the lead manager of FKDNX since January 1968. Three major holdings for the fund are 12% in NVIDIA, 7.9% in Microsoft and 7.5% in Amazon.FKDNX’s 3-year and 5-year annualized returns are 30.7% and 8.5%, respectively. Its net expense ratio is 0.77%. FKDNX has a Zacks Mutual Fund Rank #1.Janus Henderson VIT Global Technology and Innovation Portfolio JGLTX invests primarily in companies expected to benefit from technological advancements, with a substantial portion of assets in firms tied to various countries outside the United States. JGLTX maintains a non-diversified investment approach.Denny Fish has been the lead manager of JGLTX since January 2016. Three major holdings for the fund are 15.5% in NVIDIA, 11.9% in Microsoft and 10.6% in Taiwan Semiconductor.JGLTX’s 3-year and 5-year annualized returns are 36.7% and 13.8%, respectively. Its net expense ratio is 0.72%. JGLTX has a Zacks Mutual Fund Rank #1.Want key mutual fund info delivered straight to your inbox?Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.SeeWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (CMTFX): Fund Analysis Report Get Your Free (FKDNX): Fund Analysis Report Get Your Free (JGLTX): Fund Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks