More often than not, the technology sector reports relatively above par earnings fuelled by demand for technology and innovation. Moreover, during the first quarter of 2017, the Technology Select Sector SPDR (XLK) climbed 10.2% and was the biggest gainer among the S&P 500 sectors. Also, the technology mutual fund posted a three-month positive return of 10%, according to Morningstar.

However, technology stocks are likely to be more volatile than other sector stocks in the short run. In order to minimize this short-term volatility, almost all tech funds adopt a growth management style with a focus on strong fundamentals and a relatively broader investment horizon. Investors having an above par appetite for risk and a fairly longer investment horizon should park their money in these funds.

Below we share with you three top-rated technology mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. 

Fidelity Select Communications Equipment Portfolio (FSDCX - Free Report) seeks growth of capital by investing mainly in common stocks. FSDCX invests the lion’s share of its assets in equity securities of companies involved in the manufacture, development and sale of different communications equipment. This non-diversified fund invests in both U.S. and non-U.S. companies. Fidelity Select Communications Equipment Portfolio returned 5.1% in the last three months.

As of February 2017, FSDCX held 54 issues, with 24.35% of its assets invested in Cisco Systems Inc.

Red Oak Technology Select (ROGSX - Free Report) invests a major portion of its assets in equity securities of those companies that operate in the technology sector. ROGSX invests in both U.S. and non-U.S. companies as well as American Depositary Receipts. The fund seeks appreciation of capital for the long run. Red Oak Technology Select returned 8.7% in the last three months.

ROGSX has an expense ratio of 1.09% as compared to the category average of 1.46%.

Fidelity Select Software & IT Services Portfolio (FSCSX - Free Report) invests the majority of its assets in companies whose primary operations are related to software or information-based services. FSCSX primarily focuses on acquiring common stocks of both domestic and foreign companies. The fund uses fundamental analysis to select companies for investment purposes. Fidelity Select Software & IT Services Portfolio returned 9.6% in the last three months.

Ali Khan is the fund manager of FSCSX since 2014.