Mutual funds investing in energy and natural resources are excellent long term prospects and should be part of all well diversified portfolios. This is borne out by the fact that on many occasions, natural resources funds have outperformed the next closest domestic equity fund category by a huge margin. Most of this success is attributable to the oil and natural gas sectors where fast depleting reserves coupled with rising demand have led to a steady increase in both commodity and stock prices. Energy mutual funds greatly reduce the risk involved in investing in this sector because they hold widely diversified portfolios.
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, investors can click here to see the complete list of funds.
Rydex Energy (RYEIX) seeks capital growth. The fund utilizes the majority of its assets to purchase equity securities of firms from the energy sector traded on US markets. It also invests in derivatives and is non-diversified. The energy mutual fund has a three year annualized return of 15.85%.
The energy mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.39% compared to a category average of 1.59%.
Putnam Global Natural Resources A (EBERX) primarily invests in common stocks of energy and natural resources companies across the world. It focuses on investing in large and mid-cap companies and may hold both growth and value stocks. The energy mutual fund has a three year annualized return of 15.68%.
The fund manager is Christopher Eitzmann and he has managed this energy mutual fund since 2012.
T. Rowe Price New Era (PRNEX) seeks both capital appreciation over the long term. At least two-thirds of the fund’s 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 three year annualized return of 14.67%.
As of March 2012, this energy mutual fund held 105 issues, with 4.47% of its total assets invested in Schlumberger NV.
BlackRock All-Cap Energy & Resources Investor A (BACAX) invests a large share of its assets in equity securities of domestic and foreign energy and natural resource companies. It invests in around 25 to 30 securities at any point in time. This energy mutual fund is non-diversified and has a three year annualized return of 14.7%.
The energy mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.34% compared to a category average of 1.59%.
Fidelity Select Energy Services (FSESX) seeks capital growth. The fund invests a large proportion of its assets in companies from the energy services domain. These companies could provide services to both conventional and alternative energy firms. The energy mutual fund has a three year annualized return of 16.51%.
The fund manager is Jonathan Kasen and he has managed this energy mutual fund since 2010.
To view the Zacks Rank and past performance of all energy mutual funds, investors can click here to see the complete list of funds.
About Zacks Mutual Fund Rank
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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