Summary
ICICI Prudential Technology Fund, Tata Digital India Fund and SBI Technology Opportunities Fund are among the largest active technology funds by AUM.
Technology funds invest mainly in IT, telecom, software and digital businesses. Their sector focus can support growth, but it also increases concentration risk.
Investors should compare long-term returns, benchmark performance, expenses, portfolio concentration and fund history before choosing a scheme.
By AUM, ICICI Prudential Technology Fund, Tata Digital India Fund and SBI Technology Opportunities Fund lead the technology mutual fund category as of 30 June 2026. The category also includes several other active schemes, ranging from long-running funds to newer launches.
These funds typically invest across IT services, software, telecom and digital businesses. That gives investors targeted exposure to technology, but it also means the portfolio can feel the full impact when the sector goes through a weak phase.
The table below shows how the category has performed across different time periods (as of August 3 2026).
| Period | Technology fund category average |
| 1 year | -4.23% |
| 3 years | 5.53% |
| 5 years | 2.77% |
| 10 years | 15.78% |
The wide difference between short-term and long-term returns shows that technology funds can move through uneven market cycles. This makes it important to compare individual schemes on more than recent performance alone.
The list below covers the ten largest actively managed technology funds by AUM, along with their returns, costs, risk and portfolio details.
Best 10 Technology Mutual Funds: Quick Comparison
The following table compares the selected technology mutual funds across returns, AUM, costs, minimum SIP and risk as of August 4 2026.
| Fund name | Category/plan | 3Y CAGR | 5Y CAGR | Benchmark 5Y return | AUM | Expense ratio | Minimum SIP | Risk |
| ICICI Prudential Technology Fund | Sectoral-Technology / Direct Growth | 9.11% | 6.41% | -2.06% | ₹12,547 crore | 0.89% | ₹100 | Very High |
| Tata Digital India Fund | Sectoral-Technology / Direct Growth | 8.34% | 6.83% | 0.00% | ₹9,196 crore | 0.49% | ₹100 | Very High |
| SBI Technology Opportunities Fund | Sectoral-Technology / Direct Growth | 11.47% | 9.39% | -2.06% | ₹4,018 crore | 0.80% | ₹500 | Very High |
| Aditya Birla Sun Life Digital India Fund | Sectoral-Technology / Direct Growth | 7.45% | 6.66% | -2.06% | ₹3,589 crore | 0.76% | ₹100 | Very High |
| Franklin India Technology Fund | Sectoral-Technology / Direct Growth | 12.27% | 9.73% | -2.06% | ₹1,583 crore | 0.95% | ₹500 | Very High |
| HDFC Technology Fund | Sectoral-Technology / Direct Growth | NA | NA | -2.06% | ₹1,279 crore | 0.88% | ₹100 | Very High |
| Motilal Oswal Digital India Fund | Sectoral-Technology / Direct Growth | NA | NA | -2.06% | ₹805 crore | 0.77% | ₹500 | Very High |
| Edelweiss Technology Fund | Sectoral-Technology / Direct Growth | NA | NA | -2.06% | ₹708 crore | 0.65% | ₹100 | Very High |
| Kotak Technology Fund | Sectoral-Technology / Direct Growth | NA | NA | -2.06% | ₹505 crore | 0.88% | ₹100 | Very High |
| WhiteOak Capital Digital Bharat Fund | Sectoral-Technology / Direct Growth | NA | NA | -2.06% | ₹501 crore | 0.62% | ₹100 | Very High |
Notes:
- The funds are ranked by AUM. AUM figures are as of 30 June 2026.
- Fund returns are updated to 4 August 2026. Expense ratios are the latest displayed figures.
- HDFC Technology Fund and the four newer schemes below it have not completed three or five years. Their returns are marked NA.
- Tata Digital India Fund is the only scheme in the list benchmarked against the Nifty IT TRI, which delivered a five-year return of 0.00% as of 30 June 2026. The remaining nine funds follow the BSE Teck TRI, whose return over the same period stood at -2.06%.
- The funds listed above are not investment advice or a recommendation. The information is provided for educational purposes only.
Top 10 Technology Mutual Funds in India
The following analysis looks beyond fund size. It considers performance, benchmark, costs, portfolio composition, minimum investment and the limitations of each scheme.
1. ICICI Prudential Technology Fund
ICICI Prudential Technology Fund is the largest actively managed technology fund on the list, with an AUM of ₹12,547 crore. Its Direct plan has returned 9.11% annually over three years and 6.41% over five years.
The fund uses the BSE Teck TRI as its benchmark. Its expense ratio is 0.89%, while investors can begin with a ₹100 SIP or a ₹5,000 lump-sum investment.
Bharti Airtel and Infosys are its two largest holdings, accounting for 13.17% and 12.51% of the portfolio. Tech Mahindra, Coforge and Mphasis are also among its top positions.
Its size and established track record provide a longer performance history for assessment. However, the five largest holdings together form nearly 43% of the portfolio. A downturn affecting a few key technology and telecom companies can therefore weigh on returns.
2. Tata Digital India Fund
Tata Digital India Fund has an AUM of ₹9,196 crore, making it the second-largest active fund in the category. The Direct plan has generated a three-year CAGR of 8.34% and a five-year CAGR of 6.83%.
Its benchmark is the NIFTY IT TRI. The expense ratio stands at 0.49%, the lowest among the ten selected funds. A minimum SIP of ₹100 is permitted, while the minimum lump-sum investment is ₹5,000.
Infosys accounts for 15.73% of the portfolio. TCS, Tech Mahindra, Eternal and Bharti Airtel complete its five largest positions.
The lower expense ratio is a point in its favour. Costs still do not settle the choice, though. The top five holdings account for about 47% of the portfolio, leaving the fund sensitive to movements in a limited set of large companies.
3. SBI Technology Opportunities Fund
SBI Technology Opportunities Fund has delivered an annualised return of 11.47% over three years and 9.39% over five years. Its AUM was ₹4,018 crore at the end of June 2026.
The scheme uses the BSE Teck TRI as its benchmark. Its Direct plan has an expense ratio of 0.80%. Investors need at least ₹500 for an SIP and ₹5,000 for a lump-sum investment.
The portfolio is led by Bharti Airtel, which forms 18.44% of assets. Infosys, TCS, Eternal and Amagi Media Labs are its other major holdings.
Its three-year and five-year returns are above those of several older funds in this list. Still, Bharti Airtel alone accounts for close to one-fifth of the portfolio. Changes affecting this holding can have a visible impact on the fund’s NAV.
4. Aditya Birla Sun Life Digital India Fund
Aditya Birla Sun Life Digital India Fund had an AUM of ₹3,589 crore as of 30 June 2026. It has returned 7.45% annually over three years and 6.66% over five years.
Its benchmark is the BSE Teck TRI. The Direct plan charges an expense ratio of 0.76%, while the minimum SIP is ₹100. A lump-sum investment can be started with ₹1,000.
Infosys is the largest holding at 13.84%. The portfolio also holds Bharti Airtel, Tech Mahindra, Eternal and TCS among its main positions.
A relatively low entry amount makes the fund accessible to investors starting small. Its recent three-year return, however, has remained below those of Franklin India Technology Fund, SBI Technology Opportunities Fund and ICICI Prudential Technology Fund. Past differences may not continue.
5. Franklin India Technology Fund
Franklin India Technology Fund recorded a three-year CAGR of 12.27% and a five-year CAGR of 9.73%. These are the highest three-year and five-year figures among the five funds on this list with complete records.
The scheme has an AUM of ₹1,583 crore and uses the BSE Teck TRI as its benchmark. Its Direct plan expense ratio is 0.95%, the highest among the ten selected funds. The minimum SIP is ₹500, while a lump-sum investment starts at ₹5,000.
Bharti Airtel represents 20.50% of the portfolio. The fund also holds Infosys, Eternal and HCL Technologies, along with an 8.02% position in Franklin Technology Fund.
Its overseas fund exposure provides access beyond domestic listed companies. It also introduces currency and international market risk. The top five holdings form over 55% of the portfolio, making this one of the more concentrated options in the group.
6. HDFC Technology Fund
HDFC Technology Fund was launched in September 2023. It has not yet completed three or five years, so comparable CAGR figures are unavailable.
The fund’s two-year annualised return was negative 2.74%. Short performance periods can be affected heavily by the market conditions surrounding a fund’s launch and should be read with care.
Its AUM stands at ₹1,279 crore. The Direct plan has an expense ratio of 0.88%, while both the minimum SIP and lump-sum investment are ₹100. Its benchmark is the BSE Teck TRI.
Bharti Airtel, Infosys, TCS, HCL Technologies and Mphasis account for close to half of the portfolio. The low minimum investment is useful, but the limited track record makes it difficult to judge performance across different technology cycles.
7. Motilal Oswal Digital India Fund
Motilal Oswal Digital India Fund was launched in November 2024, so it does not yet have a three-year or five-year return history.
At the time of review, its one-year return stood at 3.98%. Since the fund is still relatively new, this figure gives only an early indication of performance.
The scheme manages assets worth ₹805 crore. Its Direct plan has an expense ratio of 0.77%, and investors can start either an SIP or lump-sum investment with ₹500. The BSE Teck TRI is its benchmark.
The portfolio is not limited to large IT services companies. Its biggest holdings include Eternal, Coforge, PB Fintech, Hexaware Technologies and Sonata Software.
This gives the fund exposure to a wider mix of digital businesses. However, its short track record and allocation to growth-focused companies make it harder to assess how the scheme may perform through different market conditions.
8. Edelweiss Technology Fund
Edelweiss Technology Fund was launched in March 2024. It has completed two years but does not yet have three-year or five-year CAGR figures.
Its two-year annualised return was 5.53%. The fund had an AUM of ₹708 crore and an expense ratio of 0.65% under its Direct plan.
Investors can begin with ₹100 through either an SIP or lump-sum investment. The scheme is benchmarked against the BSE Teck TRI.
Bharti Airtel is its largest holding. Infosys and Tech Mahindra also appear in the portfolio, alongside NVIDIA and Ather Energy.
The mix provides exposure to Indian telecom, IT services, global semiconductors and electric mobility. These businesses do not respond to the same factors, which can help spread company-specific risk. However, overseas exposure, newer listed companies and a limited fund history add separate uncertainties.
9. Kotak Technology Fund
Kotak Technology Fund started in March 2024. Its available two-year annualised return was negative 5.13%, while longer three-year and five-year figures were unavailable.
The fund has an AUM of ₹505 crore. Its Direct plan charges an expense ratio of 0.88%, with a minimum SIP and lump-sum investment of ₹100 each.
It uses the BSE Teck TRI as its benchmark. Bharti Airtel and Infosys together account for 33.70% of the portfolio. Eternal, Tech Mahindra and TCS take the share of the top five holdings to about 53%.
The fund has meaningful exposure to established companies. This can provide liquidity, but it does not remove sector or concentration risk. The short performance record also makes comparisons with older technology funds less reliable.
10. WhiteOak Capital Digital Bharat Fund
WhiteOak Capital Digital Bharat Fund was launched in October 2024. It had generated a one-year return of 1.98% at the time of review, with no three-year or five-year history available.
The scheme has an AUM of ₹501 crore and a Direct plan expense ratio of 0.62%. Investors can start an SIP with ₹100 or make a minimum lump-sum investment of ₹500.
Its benchmark is the BSE Teck TRI. Bharti Airtel and Eternal are the two largest holdings, followed by PB Fintech, Coforge and CarTrade Tech.
The top five companies form less than 30% of the portfolio, indicating a wider spread than some older peers. However, its portfolio turnover was high and the fund has operated for less than two years. Investors have limited evidence of how its strategy may behave through a full market cycle.
How We Selected These Technology Funds
The list was prepared using the Equity: Sectoral-Technology category. The category contained 34 active and passive schemes at the time of review.
The selection method was as follows:
- Active funds only: Actively managed technology funds were considered. ETFs, index funds and funds of funds were excluded.
- Ranking by AUM: The eligible funds were arranged by assets under management as of 30 June 2026.
- Direct Growth plans: Direct plans were used for returns, expense ratios and investment amounts.
- Comparable periods: Three-year and five-year CAGR figures were included only where the fund had completed the full period.
- Supporting review: Risk, costs, portfolio holdings, benchmark and minimum investment were examined separately. They did not alter the AUM ranking.
AUM shows how much money a fund manages. It does not establish return quality, downside protection or suitability.
Investors can read more about how Mutual Funds work before comparing individual schemes.
Technology Funds vs Other Fund Categories
Technology funds invest within a narrow part of the equity market. Other categories may spread money across sectors, company sizes or asset classes.
| Fund category | Investment scope | Concentration | Common portfolio role | Suitable horizon |
| Technology funds | Technology, telecom and digital businesses | High | Limited sector allocation | Seven years or more |
| Large-cap funds | Mainly large listed companies across sectors | Lower than sector funds | Core equity allocation | Five years or more |
| Flexi-cap funds | Companies of different market sizes and sectors | Diversified | Core equity allocation | Five years or more |
| Index funds | Companies included in the selected index | Depends on the index | Low-cost passive allocation | Five years or more |
| Hybrid funds | Equity, debt or other assets | Spread across asset classes | Risk-balancing allocation | Depends on the scheme |
Large-cap mutual funds invest mainly in established companies across industries. They remain exposed to equity risk but are not dependent on a single sector.
Flexi-cap funds can move across large, mid and small companies. Their wider mandate gives the manager more scope to adjust the portfolio.
Index funds follow a chosen index rather than relying on active stock selection. A broad-market index fund provides wider diversification, while a technology index fund remains concentrated.
Hybrid mutual funds combine equity with debt or other assets. They may suit investors who want less dependence on pure equity than a technology fund provides.
Benefits and Risks of Technology Mutual Funds
Technology mutual funds provide focused access to businesses linked to software, telecom, digital platforms and newer technology-led industries.
Benefits of technology mutual funds
- Focused sector exposure: Investors can take a specific allocation to technology without selecting individual companies.
- Professional stock selection: An active fund manager decides which technology-related companies to hold and when to change exposure.
- Access to different technology segments: Some portfolios extend beyond IT services into telecom, digital platforms, electronics and overseas technology companies.
- Small SIP options: All ten selected funds allow SIPs starting between ₹100 and ₹500.
- Potential diversification within technology: Active funds can hold companies with different business models rather than following a fixed technology index.
The same focus creates risks.
Risks of technology mutual funds
- Sector concentration: Poor performance across the technology sector can affect most holdings at the same time.
- Company concentration: Some funds place a sizeable share of assets in their top five companies.
- Valuation risk: Technology shares can fall when earnings growth does not meet market expectations.
- Global spending risk: Indian IT services companies depend partly on technology spending by overseas clients.
- Portfolio overlap: Many funds hold the same large companies, including Infosys, Bharti Airtel, TCS and Tech Mahindra.
- Sharp price movements: Every fund in the selected list carries a Very High Riskometer classification.
Who Should Consider and Avoid Technology Funds?
Technology funds may suit a limited group of investors. They are generally better used as a supporting allocation rather than the main equity investment.
Who may consider technology funds?
- Investors with a high tolerance for market fluctuations
- Those who can remain invested for seven years or longer
- Investors who already have a diversified core portfolio
- Those seeking a measured allocation to technology and digital businesses
- Investors willing to review sector exposure periodically
Who should avoid technology funds?
- First-time investors looking for one core mutual fund
- Investors with short-term financial goals
- Those who may need the money within a few years
- Investors uncomfortable with sudden declines
- Those whose existing portfolio already has high technology exposure
- Investors selecting funds only because of recent returns
How to Choose a Technology Mutual Fund
Choosing a technology fund requires more than comparing the latest return. The following factors provide a broader view.
- Compare long-term returns: Use three-year and five-year CAGR where available. One-year performance can change quickly.
- Check benchmark performance: Compare the fund with its stated benchmark over matching periods. A single year of outperformance offers limited evidence.
- Review risk: Read the Riskometer and examine how sharply the fund has moved during weak technology markets.
- Study the portfolio: Check the main holdings, business segments and the percentage invested in the top five or ten companies.
- Look for overlap: Compare the proposed fund with your existing equity schemes. A diversified fund may already hold several large IT companies.
- Compare expense ratios: A higher expense ratio reduces the return retained by investors. It should be considered alongside strategy and performance.
- Assess the fund manager: Review the manager’s tenure and experience. Recent manager changes may reduce the usefulness of older performance data.
- Check the fund’s history: Newer funds do not have enough data for full three-year or five-year comparisons.
- Understand the benchmark: Most funds here use the BSE Teck TRI, while Tata Digital India Fund uses the NIFTY IT TRI. Benchmark differences can affect comparisons.
- Match the fund to your portfolio: A technology scheme should fit the investor’s broader asset allocation, not be judged in isolation.
SIP vs Lump Sum for Technology Funds
The following table compares SIP and lump-sum investing in technology mutual funds.
| Criteria | SIP | Lump sum |
| Investment method | Fixed amount invested regularly | Entire amount invested at once |
| Entry timing | Spread across several dates | Dependent on one entry date |
| Cost averaging | Available | Not available after investment |
| Effect of volatility | Units are purchased at different NAVs | Entire amount faces market movement immediately |
| Cash-flow suitability | Regular monthly income | Existing surplus amount |
| Main limitation | May invest slowly during a sustained rise | Higher timing risk |
A SIP spreads purchases across different market levels. When NAVs fall, the same instalment buys more units. This does not prevent losses, but it reduces dependence on one entry date.
A lump-sum investment gives the entire amount immediate market exposure. It may suit an investor with available surplus and a long horizon. Technology funds can move sharply, so investing a large amount at one point carries greater timing risk.
Direct vs Regular Technology Funds
Direct and regular plans invest in the same underlying portfolio. The difference lies mainly in how the plan is purchased and what it costs.
| Criteria | Direct plan | Regular plan |
| Investment route | Directly through the AMC or supported platform | Through a distributor or adviser |
| Distributor commission | Not included | Included |
| Expense ratio | Usually lower | Usually higher |
| NAV | Higher because of lower recurring costs | Lower because of higher recurring costs |
| Portfolio | Same underlying portfolio | Same underlying portfolio |
| Suitable for | Investors comfortable selecting funds themselves | Investors seeking distributor support |
A direct plan can leave more of the fund’s return with the investor because its expense ratio excludes distributor commission. The difference may appear small each year but can build over a long holding period.
A regular plan may suit investors who need help with fund selection, transactions or portfolio reviews. The advice should justify the higher recurring cost.
All performance and expense figures in this article refer to Direct Growth plans.
Taxation of Technology Mutual Funds
Technology funds generally qualify as equity-oriented mutual funds because they invest mainly in domestic equities. Their capital gains are taxed according to the holding period.
- Short-term capital gains: When units are sold within 12 months, the gains are taxed at 20%.
- Long-term capital gains: When units are sold after 12 months, gains exceeding the annual exemption of ₹1.25 lakh are taxed at 12.5%.
- Unrealised gains: No capital gains tax is payable merely because the NAV has risen. Tax generally arises when units are redeemed or sold.
- Dividends: Dividend income is added to the investor’s taxable income and taxed at the applicable slab rate.
- TDS on dividends: The fund house may deduct TDS at 10% when dividend income crosses the applicable ₹10,000 threshold during the financial year.
The ₹1.25 lakh exemption applies to aggregate eligible long-term equity capital gains during the financial year, not separately to every mutual fund. Tax provisions may change, so investors should check the latest rules before redeeming units.
Mutual fund investments are subject to market risks. Investors should read the scheme documents and consider their financial goals, risk tolerance and investment horizon before investing.
FAQs
Based on five-year CAGR among the selected funds, the top five are Franklin India Technology Fund at 9.73%, SBI Technology Opportunities Fund at 9.39%, Tata Digital India Fund at 6.83%, Aditya Birla Sun Life Digital India Fund at 6.66% and ICICI Prudential Technology Fund at 6.41%. Returns are as of 3 or 4 August 2026.
Technology funds may be considered by investors with high risk tolerance and an investment horizon of at least seven years. They should generally form a limited part of a diversified portfolio rather than the entire equity allocation.
Franklin India Technology Fund has the highest five-year CAGR among the selected funds, at 9.73% as of 4 August 2026. However, past returns alone should not determine fund selection.
Compare the fund’s long-term returns, benchmark performance, expense ratio, portfolio concentration, fund manager record and risk level. Also check whether your existing mutual funds already hold major technology companies.
These funds may suit investors who can accept sharp market movements, remain invested for seven years or longer and already have a diversified core portfolio. Conservative investors and those with short-term goals may avoid them.
Among the ten selected active funds, Edelweiss Technology Fund recorded the highest one-year return at 8.97% as of 4 August 2026. One-year performance may change quickly and should not be viewed in isolation.
No. Technology mutual funds carry very high risk because they invest heavily in one sector. Their returns are market-linked and investors may lose part of their capital.
There is no single entry point that suits every investor. Investors who understand the sector risks may invest gradually through SIPs instead of depending on short-term market timing.
A technology fund and a fixed deposit serve different purposes. Technology funds offer market-linked growth potential with high risk, while FDs provide fixed returns and greater capital stability. The suitable option depends on the investor’s goal, horizon and risk tolerance.
