Investors with a conservative mindset looking for stable current income would do well to select utilities funds. The demand for utilities services is virtually independent of prevailing economic conditions as the sector provides essential services that are used on a daily basis. Therefore, they can provide a regular source of income . As difficult market conditions, have little impact on this sector, such funds can also be used as defensive instruments.
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.
Fidelity Select Utilities Portfolio (FSUTX) seeks capital growth. The fund invests the majority of its assets in utility companies or in firms that derive a large share of their revenues from operations in this sector. The fund invests predominantly invests in common stock. It may invest in both domestic and foreign instruments. The utilities mutual fund has a one year annualized return of 17.92%.
The utilities mutual fund has an expense ratio of 0.84% compared to a category average of 1.33%.
Hennessy Gas Utility Index Investor (GASFX) invests a minimum of 85% of its assets in companies that are primarily engaged in natural gas distribution and transmission. The fund seeks to provide returns similar to that of the American Gas Association Stock Index. It may utilize all of its assets to purchase stocks which are part of the index. The utilities mutual fund has a one year annualized return of 12.22%.
Winsor H. Aylesworth is the fund manager and he has managed this utilities mutual fund since 2000.
American Century Utilities (BULIX) seeks current income and capital appreciation. The fund invests heavily in securities that are listed on at least one index made up entirely of electricity, natural gas, cable television, telecom and water or sanitation services companies. The utilities mutual fund has a one year annualized return of 12.10%.
As of December 2012, this utilities mutual fund held 45 issues, with 12.42% of its total assets invested in AT&T Inc.
Gabelli Utilities AAA (GABUX) invests a large share of its assets in both domestic and foreign firms primarily engaged in the utility business. The fund focuses on investing in common stocks of companies which pay regular dividends.Not more than 40% of its assets can be invested in foreign instruments. The utilities mutual fund has a one year annualized return of 9.61%.
The utilities mutual fund has an expense ratio of 1.40% compared to a category average of 1.33%.
Vanguard Utilities Index Fund Admiral Shares (VUIAX) seeks to mimic the performance of the MSCI U.S. Investable Market Index (IMI)/ Utilities 25/50. This index comprises of domestic utility companies regardless of their market capitalization.. The utilities mutual fund is non-diversified and has a one year annualized return of 11.05%.
Donald M. Butler is the fund manager and he has managed this utilities mutual fund since 2004.
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.
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