Kip 25

We Welcome a Tech Fund to the Kip 25

T. Rowe Price Global Technology sees promise in smaller tech companies leading changes to consumer services.

When a Kiplinger 25 fund closes to new investors, we replace it because we believe the funds on our list should be available to all readers. American Century Small Cap Value (ASVIX), after a torrid recent run, closed in August.

When we looked for a replacement, we decided to shift things a bit. The Kip 25 roster was left with five funds that focus on small and midsize companies, but it lacked one that focuses on technology, a fast-growing sector. That’s why we're adding T. Rowe Price Global Technology (PRGTX, $31.62) to the Kip 25.

Manager Alan Tu, who hunts all over the world for high-quality companies of any size, isn’t afraid to go his own way. He doesn't own Alphabet (GOOGL), Apple (AAPL) or Microsoft (MSFT), for example. The fund's top holdings – Korea-based internet platform Sea Limited (SE), software firm Atlassian (TEAM) and Zoom Video Communications (ZM) – are smaller by market value.

"We're not bearish on the mega-cap companies," says Tu. But he sees promise in smaller ones. "We're early in this digital transformation era. A lot of the trends driving growth are accelerating, creating opportunities."

Software as a service, for example, is entering a new phase. Instead of going after big companies to sign long-term contracts – Atlassian is going straight to the consumer. Social media companies are evolving into e-commerce sites: Facebook users can buy certain wares directly on the platform. And the pandemic may have changed grocery shopping forever. That’s why Tu likes Grab, Southeast Asia's version of Uber Technologies (UBER) and DoorDash (DASH); he also has a stake in private grocery delivery service Instacart.

Earlier this year, Tu exited Chinese tech giants Alibaba Group (BABA) and Tencent Holdings (TCEHY), which are reeling from regulatory crackdowns. "We avoided a lot of carnage," he says. But the curbs aren’t a "deathblow," he adds, so those stocks may find a place in the fund again soon.

Tu is relatively new; he stepped in as manager in March 2019. But he has been a Price analyst since 2013, mostly for Global Technology, and he has the heft of Price’s analyst bench behind him. Since he took over, the fund has gained an annualized 42.4%, beating 83% of his peers.

Most Popular

Why Are Gas Prices Still Going Up?
spending

Why Are Gas Prices Still Going Up?

The cost of a gallon of gas is heading back toward its March highs. What’s driving the resurgence, and will gas prices go down anytime soon?
May 23, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
Retirement Income Shouldn’t Depend on the Market; It Should Depend on Math
retirement planning

Retirement Income Shouldn’t Depend on the Market; It Should Depend on Math

The math isn’t as tough as you might think. It all starts with dividing your assets into three different buckets.
May 23, 2022

Recommended

What You Need to Know About Mutual Fund Returns
mutual funds

What You Need to Know About Mutual Fund Returns

A guide to the many ways these popular investments measure their performance.
May 26, 2022
9 Great Alternative-Strategy Funds for Volatility
mutual funds

9 Great Alternative-Strategy Funds for Volatility

These alternative-strategy funds can offer some shelter from stock and bond market turmoil.
May 26, 2022
FWRLX: Shopping the Telecommunications Bargain Bin
mutual funds

FWRLX: Shopping the Telecommunications Bargain Bin

This fund invests in stocks in the communications services sector, which have been drastically marked down.
May 25, 2022
How Many Stocks Should You Have in Your Portfolio?
stocks

How Many Stocks Should You Have in Your Portfolio?

It's been a volatile year for the market. One of the best ways for investors to smooth the ride is through a diverse selection of stocks and stock fun…
May 25, 2022