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.
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 15.63%.
The fund manager is Michael Neches and she has managed this utilities mutual fund since 2013.
Invesco Dividend Income Investor (FSTUX) invests the majority 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 12.50%.
The utilities mutual fund has an expense ratio of 1.26% compared to a category average of 1.21%.
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 11.94%.
As of September 2013, this utilities mutual fund held 52 issues, with 9.14% of its total assets invested in AT&T Inc.
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 3.56%.
The fund manager is Sheba Alexander and she has managed this utilities mutual fund since 2012.
MFS Utilities A (MMUFX) seeks total return. It invests the majority of its assets is securities issued by companies from the utilities sector. It focuses on purchasing equity securities but may also purchase debt instruments. The bulk of the debt securities held are rated investment grade. This utilities mutual fund has a three year annualized return of 13.65%.
The utilities mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.02% compared to a category average of 1.19%.
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.
Read the analyst report on UTPIX
Read the analyst report on FSTUX
Read the analyst report on BULIX
Read the analyst report on PUGIX
Read the analyst report on MMUFX
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