Energy mutual funds offer an attractive opportunity to investors with a long term horizon since they represent a stable industry with a bright future. The demand for energy continues to rise steadily and this is particularly true of nations growing at a rapid pace. Along with this trend, the pressure on natural resources which are harnessed to provide energy and related services has also increased considerably. With the advantages of professional management and well diversified portfolios mutual funds are the most viable route to invest in this sector.
Below we will share with you 5 top rated energy mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all energy funds, then click here.
Invesco Energy (NASDAQ:FSTEX - News) seeks long term capital growth. The fund utilizes a large proportion of its assets to purchase securities of energy companies. This includes companies which produce or distribute conventional energy, as well as energy conservation and alternative energy companies. This energy mutual fund has a five year annualized return of 1.95%.
The energy mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.13% compared to a category average of 1.64%.
Ivy Global Natural Resources A (NASDAQ:IGNAX - News) invests the majority of its assets in equity securities of companies, whose primary operations are related to natural resources, including suppliers and service providers. The fund focuses on investing in foreign companies or domestic firms with major overseas operations. The energy mutual fund has a ten year annualized return of 11.82%.
The fund manager is Fred Sturm and he has managed this energy mutual fund since 1997.
T. Rowe Price New Era (NASDAQ:PRNEX - News) seeks both capital appreciation over the long term. At least two-thirds of the funds assets are invested in natural resource companies which could benefit from rising inflation. It also invests in companies outside the sector with strong earnings potential. The energy mutual fund has a five year annualized return of 1.41%.
As of June 2011, this energy mutual fund held 94 issues, with 5.10% of its total assets invested in Schlumberger NV.
Vanguard Energy Index (NASDAQ:VENAX - News) invests in approximately all of the equity securities which make up its target index, the MSCI US Investable Market Energy 25/50 Index. This index is made of large, medium and small domestic companies from the energy sector. The energy mutual fund returned 5.61% in the last one year period.
The energy mutual fund has an expense ratio of 0.24% compared to a category average of 1.64%.
Putnam Global Natural Resources A (NASDAQ:EBERX - News) seeks capital growth. The fund primarily invests in common stocks of energy and natural resources companies across the world. It focuses on acquiring value stocks and invests in large and mid-cap companies. The energy mutual fund has a ten year annualized return of 8.41%.
The fund manager is Steven Curbow and he has managed this energy mutual fund since 2008.
To view the Zacks Rank and past performance of all energy mutual funds, then click here.
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By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.
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