Top 5 Zacks #1 Ranked Utilities Mutual Funds

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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.

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 22.86%.

Hratch S. Najarian is the fund manager and he has managed this utilities mutual fund since 2011.

Gabelli Utilities AAA (GABUX) invests a majority of its assets in utilities companies. The fund focuses on acquiring securities of firms providing electricity, gas and water services or equipment for these industries. Not more than 40% of its assets are utilized to purchase foreign securities. The utilities mutual fund has a three year annualized return of 15.97%.

As of December 2011, this utilities mutual fund held 282 issues, with 4.14% of its total assets invested in National Fuel Gas Company.

Invesco Utilities Investor (FSTUX) seeks capital growth over the long term. The fund 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. The utilities mutual fund has a three year annualized return of 15.34%.

The utilities mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.45% compared to a category average of 1.36%.

Putnam Global Utilities A (PUGIX) 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 7.21%.

Michael R. Yogg is the fund manager and he has managed this utilities mutual fund since 2000.

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 16.36%.

The utilities mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.87% compared to a category average of 1.36%.

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.

Read the analyst report on UTPIX

Read the analyst report on GABUX

Read the analyst report on FSTUX

Read the analyst report on PUGIX

Read the analyst report on RYAUX



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