With every passing year, the world’s appetite for energy continues to increase steadily. Governments and corporations alike are therefore constantly on the lookout for new energy sources or more efficient technology in this domain. For fast growing economies such as China and India, the situation is even more acute. Thus, prices of these invaluable resources are surging and investors could benefit from the situation by investing in the energy industry. Energy mutual funds are a superior option for forays into the industry as they reduce risks involved by holding 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.
Fidelity Select Energy Portfolio (FSENX) invests heavily in companies that are mainly involved in the energy field including newer sources of energy. The non-diversified fund invests in both domestic and foreign companies using fundamental analysis. Market and economic scenario also play a role in investment decision. The energy fund has returned 18.54% over the last five years. The fund has an expense ratio 0.81% as compared to category average of 1.64%.
BlackRock All-Cap Energy & Resources A (BACAX) seeks capital appreciation over the long term. It invests the majority of its assets in domestic and foreign natural resources and energy companies. It may also invest in related businesses and utilities. However, a minimum of 25% of its assets must be invested in the energy sector. The energy fund has returned 14.34% over the last five years.
As of January 2014, this non-diversified fund held 31 issues with 10.63% of its assets invested in Royal Dutch Shell PLC ADR Class A.
Rydex Series Trust Energy (RYEIX) invests a lion’s share of its assets in domestic energy companies and derivatives. It invests in small to mid-cap companies and may also buy American Depositary Receipts for exposure to non-US energy firms. The energy fund has returned 16.69% over the last five years.
Michael P. Byrum is the fund manager and has managed this non-diversified fund since 1998.
Guinness Atkinson Alternative Energy (IGNAX) seeks capital appreciation. It invests heavily in equity securities of companies across the globe, whose primary operations are related to natural resources, including suppliers and service providers. A minimum of 65% of its assets are invested in a minimum of three countries and may include domestic firms. The energy fund has returned 11.82% over the last five years.
The fund has an expense ratio of 1.52% as compared to category average of 1.52%.
RS Global Natural Resources A (RSNRX) invests most of its assets in securities of global natural resources companies. These companies should have a presence in a minimum of three countries, including the US. The fund aims to hold about 30 to 40 security positions. The energy fund has returned 15.38% over the last five years.
As of December 2013, this fund held 36 issues with 5.47% of its assets invested in First Quantum Minerals Ltd.
To view the Zacks Rank and past performance of all energy mutual funds, investors 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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