Even during difficult economic conditions, the demand for essential services such as utilities remains more or less constant. This is why utilities funds are an excellent choice for investors who are seeking a steady income flow through consistent yields from dividends. In fact, investments in this sector are usually considered to be a conservative investment option. Moreover, in the past utilities funds have ventured into emerging markets and provided appreciably higher returns at relatively lower levels 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.
Allianz RCM Global Water (AWTAX) seeks long term capital appreciation by investing majority of its assets in utility companies that are predominantly engaged in the water-related business. The fund may invest in non-U.S companies including emerging markets. At any time, the fund in exposed to at least eight countries. This utilities mutual fund has a three year annualized return of 9.50%.
The utilities mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.68% compared to a category average of 1.43%.
ProFunds Utilities UltraSector (UTPIX) seeks to provide 150% of the daily return of the Dow Jones U.S. Utilities Index by investing in equity securities and derivatives with identical daily returns. The balance of the fund’s assets is utilized to purchase money market securities. The utilities mutual fund has a three year annualized return of 15.92%.
Hratch Najarian is the fund manager and he has managed this utilities mutual fund since 2011.
Rydex Utilities (RYAUX) invests the majority of its assets in utilities companies whose securities are traded in the US. The fund focuses on purchasing equity securities and may also invest in derivatives. The utilities mutual fund has a three year annualized return of 11.22%.
As of September 2012, this utilities mutual fund held 67 issues, with 3.95% of its total assets invested in Duke Energy Corporation.
American Century Utilities (BULIX) seeks current income and capital appreciation. The fund invests the majority of its assets in securities listed on at least one index made up entirely of electricity, natural gas, cable television, water or sanitation services companies. The utilities mutual fund has a three year annualized return of 13.05%.
The utilities mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.68% compared to a category average of 1.42%.
Franklin Utilities A (FKUTX) concentrates on purchasing equity in public utilities companies and focuses on acquiring common stocks. More than 25% of its assets are invested in companies that provide electricity, gas, water and communication services. The utilities mutual fund has a three year annualized return of 14.03%.
John Kohli is the fund manager and he has managed this utilities mutual fund since 1998.
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.
View All Zacks #1 Ranked Mutual Funds
More From Zacks.com
- Mutual Funds
- mutual funds