Funds offer safer way to invest in tech than owning one or two individual stocks. February 28, 2007 As anyone who owned technology funds during the 2000-02 bear market knows, they are among the most volatile on the planet. Still, owning a fund should be less risky than buying one or two individual tech stocks. We consider the following three funds to be the best in the category. With tech stocks on the mend, you can use any one of them to boost returns without having to worry about picking individual companies. Just be sure to use them sparingly.You'll be hard-pressed to find more-experienced tech-stock pickers than Walter Price and Huachen Chen of Allianz RCM Technology. Each has invested in tech stocks for more than 20 years. In 1995, the duo launched RCM's institutional shares, which returned 15% annualized over the past decade to January 3. Those results beat other tech funds' returns by an average of eight percentage points per year. Price and Chen buy shares of U.S. and foreign companies that they think can rise at least 50% in the next year or two. The fund's 47 holdings, a mix of blue chips and more-speculative stocks, include Nintendo, Google and Microsoft. RCM's newer D shares (symbol DGTNX; 800-223-2413) are available without a sales charge through discount brokers. Annual fees of 1.64% are slightly less than the average for the category. A more diversified choice is Fidelity Select Technology. At last report, the $1.7-billion fund (FSPTX; 800-544-8544) held shares of 108 mostly large and midsize companies in various technology sectors. Charlie Chai, who took the fund's helm in January, had managed a similar fund, Fidelity Advisor Technology, for two years. Chai is supported by Fidelity's deep bench of analysts. Select Tech, which sports a modest expense ratio of 0.93%, returned 12% annualized over the past two years, a bit more than the category's average. Exchange-traded funds, which trade like stocks, are a cheap and simple way to add technology to your portfolio. Technology Select Sector SPDR (XLK), for example, holds the tech stocks in Standard Poor's 500-stock index. Its ten biggest holdings, which include Microsoft and Cisco Systems, account for more than half of assets. Boosted by a slug of telecommunications stocks, the ETF returned 12% in 2006, five percentage points more than the average tech fund. Rounding out its appeal is a minuscule 0.26% annual fee.