- The stock markets have seen a big resurgence since the coronavirus crisis caused a huge sell-off.
- Many investors may be looking to put money into the market.
- Tech stock and mutual funds are two time-tested strategies for investing.
- Below is a list of the top tech-focused mutual and exchange-traded funds based on their performance over the last five years, as compiled by Morningstar Direct for Business Insider.
- Click here for more BI Prime stories .
If you're like many investors, the return of the Nasdaq to record territory and the rebound of other stock indices in recent weeks following the coronavirus sell-off may have you itching to put some money back into the market.
But you may be wondering where exactly to put it.
It's no secret that many investors have a preference for tech stocks. In recent years, these often high-growth companies have frequently outperformed the broader markets. It's also no secret that many people prefer to spread their bets or offload their investment decisions to professional managers by investing through mutual funds or exchange traded funds — mutual funds that trade like stocks — rather than buying shares of individual companies.
So, if that's you, which funds should you be looking at? Well, a good place to start can be to look at those funds that have performed best over a decent period of time. As fund managers say all the time, past performance is no guarantee of future returns. But it can be an indication, particularly if a fund has done well through both ups and downs in the economic cycle.
Analysts at Morningstar Direct put together for Business Insider a list of the mutual funds and ETFs that had posted the best returns over the last five years. That time period stretched through May 31, so it includes the hit the markets took from the coronavirus crisis and the partial recovery through that date.
Many investors lately have been plowing their money into passively managed funds, whose holdings typically mirror particular indices. But the top four tech funds over the last five years were all actively overseen by human portfolio managers. Among the firms that posted top returns: ARK Investment Management, BlackRock, and Putnam.
The return figures take into account any management or administrative fees the funds assess, but do not include charges that would be incurred when buying or selling the funds. The figures also assume that any dividends or cash distributions would have been reinvested in the fund. In reverse order, here are the top 10 performing tech-funds from the past five years:
10. Berkshire Focus Fund
Ticker: BFOCX
Five-year average annualized return: 21.06%
Management: Active
Manager: Malcolm R. Fobes
Top five holdings (as of 12/31/19): Alibaba, Apple, Microsoft, AMD, Nvidia
9. Invesco Dynamic Software ETF
Ticker: PSJ
Five-year average annualized return: 21.1%
Management: Passive
Benchmark index: Dynamic Software Intellidex
Top five holdings (as of 6/4/20): DocuSign, Snap, Liberty Broadband, Adobe, Microsoft
8. Janus Henderson VIT Global Technology and Innovation Portfolio
Ticker: JGLTX
Five-year average annualized return: 21.15%
Management: Active
Managers: Denny Fish, Garth Yettick
Top five holdings (as of 4/30/20): Microsoft, Apple, Amazon, Adobe, Mastercard
7. iShares PHLX Semiconductor ETF
Ticker: SOXX
Five-year average annualized return: 21.59%
Management: Passive
Benchmark index: PHLX Semiconductor Sector
Top five holdings (as of 6/4/20): Nvidia, Intel, Broadcom, Texas Instruments, Qualcomm
6. Fidelity Select Software and IT Services Portfolio
Ticker: FSCSX
Five-year average annualized return: 21.81%
Management: Active
Manager: Ali Khan
Top five holdings (as of 3/31/20): Microsoft, Adobe, Visa, Salesforce, PayPal
5. iShares Expanded Tech-Software Sector ETF
Ticker: IGV
Five-year average annualized return: 21.99%
Management: Passive
Benchmark index: S&P North American Expanded Technology Software
Top five holdings (as of 6/4/20): Adobe, Microsoft, Salesforce, Oracle, Intuit
4. Putnam Global Technology Fund
Ticker: PGTYX
Five-year average annualized return: 22.56%
Management: Active
Managers: Di Yao, Neil Desai
Top five holdings (as of 4/30/20): Microsoft, Visa, Adobe, Nvidia, Fidelity National Information Services
3. BlackRock Technology Opportunities Fund
Ticker: BGSIX
Five-year average annualized return: 23.45%
Management: Active
Manager: Tony Kim
Top five holdings (as of 4/30/20): Microsoft, Apple, Amazon, Tencent, Alibaba
2. ARK Innovation ETF
Ticker: ARKK
Five-year average annualized return: 25.87%
Management: Active
Manager: Catherine D. Wood
Top five holdings (as of 6/5/20): Tesla, Square, Invitae, Crispr Therapeutics, Zillow
1. ARK Next Generation ETF
Ticker: ARKW
Five-year average annualized return: 30.88%
Management: Active
Manager: Catherine D. Wood
Top five holdings (as of 6/5/20): Tesla, Square, Roku, Zillow, 2U
Got a tip about the tech industry or tech investing? Contact Troy Wolverton via email at twolverton@businessinsider.com, message him on Twitter @troywolv , or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop .
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