NEW YORK (Reuters) - Large investors, whose high exposure to large-cap technology stocks boosted their returns during the first quarter of the year, are doubling down on their investments even as stocks like Apple Inc AAPL.O and Facebook Inc FB.O stumble.

FILE PHOTO: The Apple logo is seen on a computer screen in an illustration photo taken in Bordeaux, France, February 1, 2017. REUTERS/Regis Duvignau/File Photo

Fund managers such as T Rowe Price and Federated Investors, who were already overweight the sector, said they were buying beaten-down so-called 'FANG' stocks – Facebook, Amazon.com Inc AMZN.O, Netflix Inc NFLX.O and Google-parent Alphabet Inc GOOGL.O - during a two-day selloff that marked the largest tech sector decline in nearly a year.

Google, Apple and other large tech stocks rose modestly in morning trading Tuesday.

Jeff Rottinghaus, portfolio manager of the T Rowe Price Large-Cap Core Equity fund PAULX.O, said he has been adding money to existing tech holdings such as Facebook and Amazon because they are positioned to continue to grow over the next few years regardless of the direction of the overall economy.

With other secular growth stories hard to find, “It’s getting to the point where you have to say, ‘What else do you want me to own?’” he said, adding that these companies continue to be up significantly year-to-date despite recent declines.

Analysts expect the S&P 500 technology index .SPLRCT to grow its earnings by 12.4 percent this year, better than the S&P 500's 11.6-percent expected growth, according to Thomson Reuters I/B/E/S.

About 40 percent of the stocks in the S&P 500 information technology index rose on Monday, including Qualcomm Inc QCOM.O and International Business Machines Corp IBM.N, which have lagged in 2017.

"This tech selloff is a great buying opportunity," said Navellier & Associates Chairman Louis Navellier, who bought shares of Micron Technology Inc MU.O, Applied Materials Inc AMAT.O, Arista Networks Inc ANET.N and STMicroelectronics NV STM.PA.

In the 8-year-old bull market, investors have consistently been ‘buying the dips,’ taking advantage of brief pullbacks in prices, so large-cap stocks have not seen a 10-percent correction in well over a year. Although stocks are expensive by historical measures, bullish investors say they are justified by growth in earnings and the U.S. economy, while historically low bond yields are also making stocks more appealing.

COMEBACK OF THE ‘TRUMP TRADE?’

The stumble in tech comes a time when both mutual funds and hedge funds have taken outsized bets on the sector, helping push Facebook, Amazon, Apple and Microsoft to add a total $600 billion in market cap year-to-date. Tech stocks in the S&P 500 rallied 21 percent for the year through June 2nd, with the largest companies accounting for 46 percent of the S&P 500’s 9-percent gain, according to Goldman Sachs.

That rally sent some tech-heavy tech funds soaring.

In May, Light Street Capital Management’s $1.2-billion Halogen fund was up 11 percent and is up 42.6 percent this year through the end of May. The head of the fund, Glen Kacher, started his career at Tiger Management, Julian Robertson’s famous fund.

Yet concerns that fund managers had piled into the same stocks and stretched their valuations helped prompt a selloff that began Friday and continued through Monday, sapping 5 percent or more from companies such as Apple.

Momentum-based technology stocks have “built a valuation air pocket underneath [them] creating cause for pause,” Goldman Sachs wrote in a note Friday.

Steve Chiavarone, a portfolio manager at Federated Investors in New York, said he saw the tech selloff as a sign that investors were feeling more confident that the Trump administration could pass infrastructure or tax legislation later this year.

Last week’s testimony by former FBI chief James Comey did not contain the sort of bombshell that investors had feared, Chiavarone said, prompting fund managers to rotate out of tech into sectors that have lagged.

“It allowed folks to believe once again that Congress isn’t going to be bogged down in a massive impeachment effort and could get some policy work done,” he said, which would benefit energy and financial stocks that initially rallied following Trump’s unexpected victory but lost their gains following Inauguration Day.