Alphabet Inc. (GOOGL - Free Report) posted favorable earnings results in the third quarter. The online advertising service provider posted earnings beat for the quarter, as the tech giant continues to enjoy strength in the mobile platform.

Alphabet’s encouraging earnings results had a positive impact on the technology sector and boosted investors’ sentiment. Following the promising development, investing in technology mutual funds with a significant holding in the California-based company will be prudent.

Q3 Earnings in Focus

Alphabet’s non-GAAP earnings of $13.06 in the third quarter of 2018 surpassed the Zacks Consensus Estimate of $10.54. Also, earnings increased 11.1% sequentially and 36.5% year over year. Net revenues, excluding total traffic acquisition cost came in at $27.16 billion. Although total revenues rose 3.5% sequentially and 21.9% year over year, it missed the Zacks Consensus Estimate of $27.32 billion.

One of Apple’s key growth drivers is Accelerated Mobile Pages (AMP), which is being accepted by a number of publishers and sites across the world. Management is focused on driving mobile experiences and the company is well positioned to pick up strong intent-to-buy signals by studying mobile searches from its huge database.

YouTube remains a strong contributor, benefiting from growth in online video consumption. Moreover, Google platforms like Android, Chrome and Daydream continue to help it in drawing more users, and selling more ads.

Alphabet’s Earnings Beat: Boon for Technology Sector

Technology is now the best-performing sector year to date (YTD). The technology sector has jumped 6.5% YTD, becoming the best-performing sector on the S&P 500. In fact, the tech sector’s performance is better than the S&P 500’s decrease of 0.6%.

Along with Alphabet, strong earnings results by Amazon.com, Inc. (AMZN - Free Report) and Intel Corporation (INTC - Free Report) also supported the technology sector. The sector will be in the spotlight this week with Apple and Facebook reports expected to take total Q3 earnings up 23.6% on 12.1% higher revenues.

In fact, mutual funds related to this sector registered best returns in all the sector equity fund categories. According to Morningstar, technology mutual funds have returned 1.6% YTD.

Buy 3 Tech Mutual Funds

Here we have selected three technology mutual funds that have significant exposure to Alphabet. Moreover, these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds.

These funds also have encouraging one-year returns and minimum initial investment within $5000. Also, each of these funds has a low expense ratio.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

Deutsche Science and Technology Fund (KTCSX - Free Report) seeks capital growth. KTCSX invests a large chunk of its assets in common stocks of companies from the science and technology sector. Although the fund invests mainly in domestic companies, it also invests around 35% of its assets in non-United States companies.

KTCSX carries an expense ratio of 0.81% compared with the category average of 1.37%. Moreover, KTCSX requires a minimal initial investment of $2,500. The fund has one-year annualized returns of 29.9%.

KTCSX has a Zacks Mutual Fund Rank #2. Daniel J. Fletcher is one of the fund managers of KTCSXsince 2017. Further, as of the last filing, KTCSX held 4.19% of its assets invested in Alphabet. The technology behemoth is the sixth-biggest holding of KTCSX.

Invesco Technology Investor (FTCHX - Free Report) seeks capital growth for the long run. FTCHX invests heavily in securities of companies from technology-oriented industries. The fund invests mainly in equity securities, including common stocks of technology companies.

FTCHX carries an expense ratio of 1.19% compared with the category average of 1.37%. Moreover, FTCHX requires a minimal initial investment of $1,000. The fund has one-year annualized returns of 26.3%.

FTCHX has a Zacks Mutual Fund Rank #1. Erik J. Voss is one of the fund managers of FTCHX since 2014. Further, as of the last filing, FTCHX held 4.60% of its assets invested in Alphabet. The search engine giant is the fifth-largest holding of FTCHX.

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.

FSCSX carries an expense ratio of 0.73% compared with the category average of 1.37%. Moreover, FSCSX requires a minimal initial investment of $2,500. The fund has one-year annualized returns of 33.4%.

FSCSX has a Zacks Mutual Fund Rank #2. Ali Khan is the fund manager of FSCSX since 2014. Further, as of the last filing, FSCSX held 9.62% of its assets invested in Alphabet. The technology behemoth is the third-largest holding of FSCSX.