3 Best IT Sector Mutual Funds 2025: Is Investing in IT Sector Good?

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Did you know India's tech industry has earned a well-deserved place in the global markets? Yes, this reliability has made the IT Sector Mutual Funds a go-to option for many investors. But you might ask how did it achieve that?

Well, all thanks to the Modi government 2.0, showing strong support, a large talent pool, a good English-based educational system and an open mutual funds market has been the riding wheel behind the tech boom of the IT sector.

According to the survey, India spends nearly 112.6 billion dollars annually in the IT sector, being popular for its high-quality IT outsourcing services. It has offered a good opportunity for you to make high returns by investing in the best IT sector mutual funds in 2025.

This analysis explores the 3 Best IT Sector Mutual Funds 2025 and concludes with why it is a good investment for you.

3 Best IT Sector Mutual Funds 2025: Analyst Choice

Here are the 3 best technology mutual funds to invest in 2025:

Also Read: IT Sector Mutual Fund Delivered 20% Returns in 3 Months: Should You Invest?

Franklin India Technology Fund

After being launched on 2nd August 1998, the Franklin India Technology Fund is amongst the oldest schemes in technology funds. This IT sectoral fund keeps its major investment in high-potential technology businesses, following an investing strategy that is a mix of buy and hold and active investing that gives your growth and value investments.

Well, talking only about the Mutual Funds does no good, right? So, let’s compare the 3 and 5-year returns with benchmark returns:

Now just imagine that you started a SIP of Rs.3000 in this technology mutual fund 5 years back, as of now you would have invested Rs.1,80,000 on which after profit your total would be a whopping Rs.3,29,908 lakhs in today’s date.

Pro Tip: Use the SIP Calculator to see the estimated returns yourselves.

Do you think this is all you need to know before starting a systematic investment plan in this fund? You need to take a look at the below table that covers the quality of stocks of this fund:

This fund has a PE ratio of 33.24, meaning it is priced a bit higher compared to its earnings. Its earnings growth is 16.96%, meaning it has an average profitability. Sales have grown by 13.07%, indicating steady revenue growth. The cash flow growth is 15.08%, which suggests the fund is managing its operations and finances well.

Must Read: Boost Your Profits with SBI Technology Opportunities Fund in a Hot Market

ICICI Prudential Technology Fund

The ICICI Prudential Technology Mutual Fund started on 3rd March 2000, with a robust AUM (Asset Under Management) of Rs.13,990 Crores. It has a unique selling price that involves investing in the leading tech companies in India, like Wipro, Tech Mahindra and Infosys, which have robust R&D development and hold top positions in the tech industry.

Let’s check the returns of this technology mutual fund compared against its benchmark:

Keeping the mentioned returns in your head, if you started a Rs.3000 SIP in this IT sector mutual fund 5 years ago, your total investments would be Rs.1,80,000, and you would have achieved a handsome profit of Rs.Rs.3,24,649 lakhs as of today.
Although it is an excellent investment opportunity, why not double-check its stock quality? Refer to the table below for that:

With a PE ratio of 32.63, this fund is slightly cheaper than some others in the category. Its earnings growth is solid at 17.29%, showing good business performance. Sales have grown by 15.24%, which is healthy, though the cash flow growth at 12.10% could be better in terms of generating liquidity.

Tata Digital India Fund

This fund is tech-driven and was established on 5th December 2015. It targets emerging tech businesses using a bottom-up research process of companies that have a strong balance sheet and investment capabilities and hold them for long durations. The Tata Digital India Fund keeps its major investment in innovative technology and digital businesses.

Let’s see why it's among the top technology mutual funds by comparing the returns with benchmark returns:

Keeping the above returns in mind, if you started a SIP of Rs.3000 in this technology fund 5 years back, your total investments would stand at Rs.1,80,000 on which you would have made a good profit of Rs.3,34,821 lakhs as of now.

Although, it’s a great choice for investment, why not take a look at its stock quality for double-check? Refer to the below table for that:

This fund has a PE (Price-to-earnings) ratio of 32.93, the same as the other best IT sector mutual funds. Its earnings growth is 22.99%, making it stand out with strong profit potential. Sales growth is also strong at 15.63%, but the cash flow growth of 11.49% is on the lower side, showing some challenges in generating cash from operations.

Expert Views on: The Future is Digital: Why Tata Digital India Fund Should Be in Your Portfolio

What are the Advantages of Sectoral Technology Funds?

The following points tell you the benefits of investing in the Best IT sector Mutual Funds is a good idea:

1. High Growth Potential

Technology funds can offer better returns than other investments, especially when the economy is growing and new innovations are happening. Tech is an important part of many industries, so it has the potential to grow no matter what the economic situation is.

2. Diverse Exposure Within Tech

Even though these funds focus on tech, they invest in different areas like software, hardware and other tech-related industries. This gives you a mix of companies within the tech sector.

3. Expert Management

Investing directly in the tech sector can be risky because of things like changing regulations or market shifts. Professionals who keep an eye on the market and make decisions to reduce these risks manage these funds.

4. Benefit from Global Trends

Technology is at the heart of major global trends like automation, data analysis and digital payments. Sectoral tech funds give you the opportunity to invest in these growing areas, which could help the fund perform well over time.

Learn How: You Can Earn 1 Crore with 15-15-15 Mutual Fund Rule?

To Conclude on the Best IT Sector Mutual Funds 2025

In short, if you are betting your hard-earned money in the mutual funds market, it might as well be with the 3 best IT sector mutual funds that will keep your investment in the top IT companies like Wipro, Tata, HCL Technologies and many such.

You can move forward with the all-time best strategy to start a SIP (Systematic Investment Plan) for disciplined investing and the added flexibility of the SIPs. It's your turn to make high returns from the fast-growing tech world.

Frequently Asked Questions on Technology Mutual Funds

1. What are Sectoral Technology Funds?

Sectoral technology funds focus on investing in tech companies, covering areas like software, hardware, and digital services. They allow you to invest specifically in the tech sector.

2. Is Investing in the IT Sector a Good Idea for 2025?

Yes, the IT sector is likely to grow in 2025 due to continued innovation in areas like AI and digital payments. However, it’s important to keep in mind the potential risks and do thorough research before investing.

3. How do Technology Mutual Funds Work?

Technology mutual funds pool money from investors and invest it in a range of tech stocks. Professional fund managers choose the investments, aiming to grow the fund while spreading risk across different tech companies.

4. Should You Invest in IT Funds During a Tech Boom?

IT funds can do well during a tech boom, but it’s important to be cautious. Prices can become inflated, so a long-term approach is recommended rather than chasing short-term trends.

5. Are Technology Mutual Funds Safe for Long-term Investment?

Technology mutual funds can be a good choice for long-term investing, but they come with risks. The tech sector can be volatile, so it is important for you to consider your risk tolerance before investing.

6. Can I Invest in IT Mutual Funds Through SIP?

Yes, you can invest in IT mutual funds through a Systematic Investment Plan (SIP), where you invest a fixed amount regularly. It helps you manage market fluctuations and build your investment over time.

7. Technology Mutual Funds vs. Tech Stocks: Which is Better?

Technology mutual funds are less risky because they spread investments across several companies. Tech stocks, on the other hand, can offer higher returns but come with more risk. Choose based on your risk tolerance and investment goals.

8. What are the Key Factors to Consider Before Investing in a Technology Mutual Fund?

Before investing, you must understand the fund’s past performance, fees (expense ratio), risk level, the manager’s experience and how the fund fits with your financial goals. Diversification within the fund is also important.