Three Semiconductor Mutual Funds Positioned for AI and Tech Growth

The technology sector continues to present compelling opportunities for long-term investors, with semiconductor mutual funds emerging as a strategic choice. Growth stems from accelerating artificial intelligence adoption, expanding cloud infrastructure deployment, and a recovering semiconductor industry. These trends suggest that semiconductor mutual funds, particularly those with strong Zacks rankings and proven performance records, may offer meaningful returns for investors targeting tech exposure.

Why AI and Semiconductors Drive Mutual Fund Growth

Artificial intelligence is fundamentally reshaping how businesses operate and deliver value. Goldman Sachs projects that cloud computing revenues will expand substantially through 2030, accelerated by AI integration and rising enterprise adoption across industries. The broader AI market itself continues its expansion trajectory, with sustained double-digit annual growth expected to fuel continued sector momentum.

Semiconductor demand reflects this broader technology momentum. Data centers, automotive electrification, and consumer electronics all depend heavily on semiconductor components, creating a multifaceted demand environment. The Semiconductor Industry Association reported that global chip sales expanded significantly in 2024, with expectations for continued robust growth throughout 2025 and beyond. This recovery strengthens the investment case for semiconductor mutual funds focused on companies manufacturing or designing these critical components.

Market Conditions Support Tech Mutual Fund Investments

Current monetary policy creates a favorable backdrop for technology stocks. With the Federal Reserve maintaining measured interest rate policy, the cost of capital for growth-oriented companies remains manageable. This environment differs sharply from periods of aggressive rate increases, which typically pressure valuations of technology and semiconductor firms.

The combination of AI proliferation, semiconductor industry recovery, and accommodative monetary conditions suggests that semiconductor mutual funds merit consideration within a diversified portfolio. Funds specializing in technology and semiconductors—particularly those with Strong Buy ratings and competitive expense structures—offer both growth potential and professional management discipline.

Evaluating Three Top-Ranked Semiconductor and Tech Mutual Funds

Three mutual funds stand out for their strong fundamentals and track records: Fidelity Select Semiconductors Portfolio (FSELX), DWS Science and Technology Fund (KTCAX), and T. Rowe Price Science and Technology Fund (PRSCX).

Fidelity Select Semiconductors Portfolio (FSELX) focuses exclusively on semiconductor design, manufacturing, and equipment companies. The fund employs fundamental analysis to select holdings, examining financial health, competitive positioning, and industry dynamics. Led by Adam Benjamin, FSELX maintains concentrated positions in leading chipmakers. Historical performance demonstrates 24.5% three-year returns and 31.2% five-year annualized returns. At 0.63% annually, its expense ratio sits well below category averages. FSELX carries a Zacks Mutual Fund Rank #1 designation.

DWS Science and Technology Fund (KTCAX) casts a broader net across the entire technology sector while emphasizing science and technology companies. Under Sebastian P. Werner’s stewardship, KTCAX diversifies across multiple technology subsectors. The fund delivered 16.5% three-year and 20% five-year returns. With a 0.87% annual expense ratio and Zacks Mutual Fund Rank #1 standing, KTCAX provides technology exposure with moderate fees.

T. Rowe Price Science and Technology Fund (PRSCX) pursues long-term capital growth by investing in companies positioned to benefit from scientific and technological advancement. Anthony Wang manages the fund’s strategic allocation, which includes international securities and derivative strategies. PRSCX generated 14.7% three-year and 16.6% five-year returns historically. Its 0.79% expense ratio and Zacks Mutual Fund Rank #1 rating make it competitive among technology-focused funds.

Which Semiconductor Mutual Fund Fits Your Strategy?

Selecting among semiconductor mutual funds depends on your investment objectives and risk tolerance. FSELX offers maximum semiconductor sector concentration for investors seeking focused exposure to chipmakers. KTCAX provides broader technology diversification while maintaining semiconductor weight. PRSCX delivers balanced growth through established technology trends including semiconductors, with international diversification.

All three funds maintain minimum initial investments of $5,000 or less, making them accessible to individual investors. Their below-average expense ratios ensure that management costs don’t unnecessarily erode returns over time. The combination of top-tier Zacks rankings, consistent multi-year performance, and competitive fee structures positions these semiconductor mutual funds as solid vehicles for gaining professional technology sector exposure.

For investors seeking systematic exposure to the semiconductor industry’s growth narrative—whether through specialized chipmaker funds or broader technology vehicles—these options warrant serious consideration as part of a long-term investment approach.