During any sustained period of stock market growth, regular setbacks are not unusual. That has certainly been the case over the last few years.

The Technology & Technology Innovation sector is a good example. Over the past three years, it has been driven primarily by the rapid development of artificial intelligence (AI) following the widespread adoption of systems such as OpenAI’s ChatGPT, launched in November 2022.

This has led to a huge capital expenditure cycle in AI infrastructure, and the continued shift towards cloud computing and digital services.

The scale of the move has been remarkable. At the end of July 2023, the Nasdaq Composite stood at about 14,346. By the end of July 2026, it had risen to 25,373.85, an increase of approximately 77% in three years.

Yet it has not all been plain sailing.

There have been several sharp dips along the way. Some have been specific to the technology sector. In January 2025, the release of DeepSeek-R1 raised questions about whether increasingly capable AI systems could be developed using substantially less computing power than previously assumed. On 27 January, NVIDIA Corp NVDA 0.32%  shares fell nearly 17%, wiping around $593 billion (£437 billion) from the company’s market value.

There was another wobble this July when Chinese AI company Moonshot unveiled Kimi K3. By then, investors were already becoming increasingly nervous about the enormous sums being committed to AI infrastructure and how quickly those investments would start producing profits.

Others have been driven by wider events. The war in Ukraine, repeated conflict in the Middle East, US President Donald Trump’s tariff policies, rising oil prices, and renewed concerns about inflation have all weighed on sentiment at different times.

The latest setback came in July, when technology stocks were hit by a double whammy: renewed US–Iran hostilities pushed oil prices higher and revived inflation concerns, while investors became increasingly worried about the scale of AI infrastructure spending and the time it might take to generate adequate returns.

Those concerns were compounded by weakness in semiconductor and memory stocks, uncertainty following the Federal Reserve’s latest decision, and investor positioning ahead of results from major technology companies.

By 29 July, the Nasdaq Composite had fallen by 10.1% from its high at the beginning of June.

However, markets then began to recover in the final days of July, and that momentum has continued into August.

The Technology & Technology Innovation sector only rose by 0.5% in June, and then fell by 6.7% in July. Even so, it still gained more than 20% over the six months from February to July. So far in August, it is up a further 8%.

That is a useful reminder that strong long-term trends rarely move in a straight line.

At Saltydog Investor, one way we try to identify funds that have performed consistently well through these ups and downs is with our 6×6 report.

Every three months, we look for funds that have gone up by at least 5% over six months, and then see which ones have managed to do that in six consecutive six-month periods.

It is a demanding test. Sometimes no funds make the grade. This time, 17 did.

The table below shows the top 10, ranked by their performance over the latest six-month period.

Data source: Morningstar. Past performance is not a guide to future performance.

Technology features prominently. Three of the top 10 funds come from the Technology & Technology Innovation sector, with Polar Capital Global Tech I Inc GBP (B42W4J8) at the top of the table. T. Rowe Price Global Tech Eq C Acc (BD446K0) and L&G Global Technology Index I Acc (B0CNH16) also make the list. Polar Cptl PLC-Artfcl Intllgnc I Acc GBP (BF0GL54) is in third place. Although it is in the Global sector, it still has a strong technology bias.

If investors want to find areas that have delivered strong gains over the past few years, technology may be an obvious place to look. What is perhaps more striking is that some funds have managed to deliver that consistent performance despite the repeated setbacks.

Polar Capital Global Technology is a good example. It has delivered gains of more than 10% in each of the last six six-month periods and tops this month’s table with a return of 31.9% over the latest six months.

Past performance is not a guide to future performance.

The chart shows that progress hasn’t been smooth. There have been several pullbacks along the way, including a particularly sharp setback in early 2025 and another decline this summer. However, the broader trend has remained firmly upwards.

For investors, that may be the key lesson. The best-performing sectors and funds often suffer sudden falls, sometimes for reasons specific to the sector and sometimes because of wider geopolitical or economic shocks. But those setbacks do not necessarily signal the end of the trend.

The latest 6×6 report suggests that, despite the recent wobble, a number of technology funds have still managed to deliver relatively consistent performance over several years.

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