Tech companies poised for growth due to potential Fed rate cut, recommended tech mutual funds.

From Nasdaq: 2024-07-17 07:58:00

The latest Consumer Price Index (CPI) report for June showed a 3% year-over-year increase, the lowest inflation rate in three years. This sets the stage for a potential interest rate cut by the Federal Reserve in September, with a 93.3% probability, as indicated by the CME FedWatch tool.

June retail sales remained steady, signaling consumer resilience and potential growth in the second quarter. Year-over-year retail sales saw a 2.3% increase, lower than the previous January surge of 7.7%. This data supports the expectation of a Fed interest rate cut in September due to cooling inflation.

With interest rate hikes on hold, tech companies poised for growth are in a favorable position. Rising interest rates typically limit growth by increasing borrowing costs and reducing cash flows. Three tech mutual funds are recommended for investors, focusing on growth potential and hedging against potential economic downturns.

The Fidelity Select Semiconductors Portfolio (FSELX) primarily invests in semiconductor companies affected by the communication services sector, boasting annualized returns of 30.4% over three years and 38.4% over five years. The annual expense ratio is 0.67%, well below the category average.

The DWS Science and Technology Fund (KTCAX) invests in science and technology companies, concentrating on industries within the tech sector. With a Zacks Mutual Fund Rank #1, this fund offers returns of 10.7% over three years and 21.1% over five years, with an expense ratio of 0.87%.

The T. Rowe Price Science and Technology Fund (PRSCX) focuses on companies generating growth from science and technology developments. Offering returns of 4.7% over three years and 17.6% over five years, with an annual expense ratio of 0.81%, this fund provides a mix of domestic and foreign investments.

Investors looking to capitalize on potential tech growth amid a potential Fed rate cut can explore these recommended tech mutual funds for diversified portfolios and growth opportunities. Check out these funds with positive performance indicators and low expense ratios, positioning them well for potential market developments.



Read more at Nasdaq: 3 Tech Mutual Funds to Buy Amid Potential Fed Rate Cut