This does not only mean names such as Cisco Systems, Microsoft and Nokia. Other contenders include the likes of Disney and the Gap, which are using new technology to transform the way they do business.
There is no shortage of specialist technology funds - including investment trusts, unit trusts and offshore funds - open to private investors. In the past year, several fund management groups have launched funds with a high technology theme, including Capel Cure Sharp, Close Brothers, Flemings, Framlington, Investec Guinness Flight, M&G, Rathbones, Sarasin and Societe Generale. These join longer established funds from Aberdeen Henderson and Scottish Equitable.
The performance of such funds has been impressive. Aberdeen Technology, the longest established, grew by 3,700 per cent (with net income reinvested) from its launch in February 1982 to 1 November 1999. It soared by 64 per cent in the first 10 months of this year alone. (By comparison, the average UK All Companies unit trust has grown by 770 per cent since 1982.)
Deciding whether such funds are an appropriate investment involves a delicate balancing act. The answer depends on an assessment of the growth prospects for the "new economy", and one's attitude to the potential risks.
Technology funds invest in companies around the world. Since there are relatively few high-tech firms in Britain, such a global technology fund can give private investors access to companies in which it might otherwise be difficult to invest directly. It is also possible to put these global funds into a tax-efficient Individual Savings Account.
Those concerned about the risks of investment in high-tech companies, many of which have yet to make profits, can also gain comfort from diversification. Even if two or three companies fail it is unlikely to damage a well-diversified fund with 50 or 60 different holdings.
Despite these advantages, there are still reasons to be cautious. First, many industry analysts are warning about a price bubble in technology stocks, given this year's huge share price rises. Those who use conventional valuation yardsticks, such as price-earnings ratios, tend to view current price levels as unsustainable. Not for them the high "valuations" being accorded to a firm's intellectual capital.
Mark Dampier, the head of research at financial adviser Hargreaves Lansdown, says: "The short-term disadvantage is that the sector's gone up like a rocket." It may be better to wait for a dip in the market before buying such funds.
Second, now that the technology sector has become mainstream it is far more challenging for investors to find bargains in the sector.
Greg Kerr, the manager of M&G's Technology unit trust, says: "If someone is going to have a heart attack if their fund is up 40 per cent one month and down 20 per cent the next, it is not an appropriate investment." A regular savings plans is one way of smoothing out volatility.
Finally, many global technology funds have most of their assets in North America. This emphasis means investors in technology funds tend to be vulnerable to a fall in the buoyant US stock market.
Daniel Ben-Ami is the editor of `Investment Adviser' Derek Pain is on holidayReuse content