Even during a market downturn, the demand for essential services such as those provided by utilities, remains virtually unchanged. Utilities funds are therefore an excellent choice for investors seeking a steady income flow through consistent yields from dividends. This is also why they are primarily considered to be a relatively more conservative investment option. In recent times their forays into emerging markets have led to appreciably higher returns and they offer superior returns at a relatively lower level of risk.
Below we will share with you 5 top rated utilities mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all utilities funds, investors can click here to see the complete list of funds.
Putnam Global Utilities A (PUGIX) seeks invests primarily in utility companies worldwide. The fund concentrates on investing in large and mid-sized firms, but may also consider smaller companies. It seeks both capital appreciation and current income. The utilities mutual fund has a three year annualized return of 7.63%.
Michael R. Yogg is the fund manager and he has managed this utilities mutual fund since 2000.
Fidelity Advisor Utilities A (FUGAX) invests the majority of its assets in public utility companies as well as those firms which derive a large share of revenues from related operations. It focuses on acquiring common stocks of both domestic and foreign companies. The utilities mutual fund has a three year annualized return of 17.29%.
The utilities mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.20% compared to a category average of 1.35%.
Rydex Utilities (RYAUX) seeks capital appreciation. The fund invests the majority of its assets in utilities companies whose securities are traded in the US. It focuses on purchasing equity securities and may also invest in derivatives. The utilities mutual fund has a three year annualized return of 17.27%.
Michael P. Byrum is the fund manager and he has managed this utilities mutual fund since 2000.
Invesco Utilities Investor (FSTUX) invests a large share of its assets in stocks of companies in the utilities sector or related industries. Firms engaged in the production and distribution of gas and electricity as well as those providing telecom services constitutes its major investments. Not more than 25% of its assets are invested in foreign companies from related industries. The utilities mutual fund has a three year annualized return of 16.07%.
As of December 2011, this utilities mutual fund held 39 issues, with 5.29% of its total assets invested in Southern Company.
Vanguard Utilities Index Admiral Shares (VUIAX) seeks to track the performance of the MSCI U.S. Investable Market Utilities Index. This index consists of companies in the utilities sector regardless of their market capitalization. The utilities mutual fund is non-diversified and has a three year annualized return of 16.83%.
The utilities mutual fund has an expense ratio of 0.19% compared to a category average of 1.35%.
To view the Zacks Rank and past performance of all utilities 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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