4 Mutual Funds to Gain From the Advent of Big Data

Rapid digitization and technological advancement have led to the creation of a huge pool of data, with daunting volumes of new data available every day. E-commerce, omnichannel marketing, business applications and Internet of Things (IoT) are constantly generating more and more such data. Big data refers to not just the enormous volume of data but also the diversity and constantly changing nature of this data. In fact, big data helps businesses and organizations effectively handle these volumes of data to increase useful insights and efficiency.

The shift to digital marketplace requires insight into customers’ behavioral pattern, tracing their social media activity, data from external surveys, prior purchase and support call history and more. These insights help companies give more personalized recommendations to customers and retain those who would leave without making a purchase. And it is not just about online stores, even brick-and-mortar stores can use video to learn how visitors navigate through aisles and what they consider at the time of purchase. Even after sales, big data helps to understand how customers are responding to their products and work on enhancing services, innovating products, and improving their strategies for competitive advantage.

Additionally, big data plays an important role in predictive analytics, keeping the demand, production and distribution cycle in check and avoiding shortage. Big data analytics can integrate data from online stores, retailers and suppliers, and help avoid supply chain disruptions. Even in manufacturing, big data has multiple utilities. For instance, with the help of predictive analysis, those in charge can frame out maintenance schedules which will reduce costly repairs or break downs of critical systems. In this case, predictive maintenance analytics helps in analyzing the condition, warranty and service required for heavy machinery.

Big data has paved its way into modern business and has become one of the greatest resources in driving toward sustainable change. In fact, this technology has spread its wings across all industries, from manufacturing to retail, entertainment to security and more. According to a ResearchAndMarkets report, the global market for big data is forecasted to reach $243.4 billion by 2027, at a CAGR of 19.4%, from nearly $70.5 billion in 2020.

4 Top Mutual Fund Picks

Growth in big data has been remarkable in the past few years and in the years ahead, creation and consumption of data will make big data one of the most valuable commodities, helping modern businesses compete. We have, thus, shortlisted four mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging year-to-date returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform peers in the future.

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 (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Fidelity Select Technology Portfolio FSPTX fund aims for capital appreciation. This non-diversified fund invests primarily in equity securities, especially common stocks of companies that are engaged in offering, using, or developing products, processes, or services that will provide or will benefit significantly from technological advances and improvements.

This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, FSPTX that has returned 31.3% and 32.7% in the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSPTX has an annual expense ratio of 0.69%, which is below the category average of 1.05%. Some of the fund’s top big data holdings are Salesforce, VMware and Google.

Franklin DynaTech Fund Class A FKDNX aims for capital appreciation. The fund invests primarily in common stocks and the fund manager focuses on companies that are leaders in innovation, take advantage of new technologies, have superior management, and benefit from new industry conditions.

This Sector-Tech product has a history of positive total returns for over 10 years. Specifically, FKDNX has returned 29.1% and 28.1% over the past three- and five-year period, respectively. To see how this fund performed compared in its category, and other #1 and #2 Ranked Mutual Funds, please click here.

FKDNX has an annual expense ratio of 0.85% versus the category average of 1.00%. Some of the fund’s top big data holdings are Google, Salesforce and Intel.

Fidelity Select Software & IT Services Portfolio FSCSX aims for capital appreciation. The non-diversified fund invests majority of assets in common stocks of companies engaged in research, design, production or distribution of products or processes that relate to software or information-based services.

This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, FSCSX has returned 28.6% over both the past three and five-year period. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSCSX has an annual expense ratio of 0.70% versus the category average of 1.05%. Some of the fund’s top big data holdings are Oracle, Salesforce, Alteryx and Google.

T. Rowe Price Global Technology Fund PRGTX aims for long-term capital growth. This non-diversified fund invests most of assets in the common stocks of companies that its managers expect will generate majority of their revenues from the development, advancement and use of technology.

This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, PRGTX has returned 30.4% and 29.6% in the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

PRGTX has an annual expense ratio of 0.86%, which is below the category average of 1.05%. Some of the fund’s top big data holdings are Salesforce, Facebook and Splunk.