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.
Guinness Atkinson Alternative Energy (GAAEX) seeks capital growth ovGAAEXer the long term. The fund invests heavily in domestic and foreign companies from the alternative energy sector. The fund invests in companies regardless of their market capitalization and may also invest in developing economies. The energy mutual fund returned 38.08% in the last one year period. The fund has an expense ratio of 1.98% as compared to category average of 1.48%.
Fidelity Select Energy Portfolio (FSENX) invests largely in companies related to the energy sector. Investments are made in conventional resources such as oil, gas and electricity, among others, and also newer resources like nuclear, geothermal, oil shale, and solar power. It generally invests in common stocks. The energy mutual fund returned 20.95% in the last one year period.
John Dowd is the fund manager and has managed this fund since 2006.
BlackRock All-Cap Energy & Resources Investor 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 mutual fund returned 23.56% in the last one year period.
As of March 2014, the fund held 33 issues with 9.85% of its assets invested in Chevron Corp.
Fidelity Select Natural Resources Portfolio (FNARX) invests a large share of its assets in companies whose principal operations are related to the natural resources industry. The fund considers a company’s financial status and industry rank, and also looks into market and economic condition for investment decisions. The energy mutual fund returned 19.72% in the last one year period.
The fund has an expense ratio of 0.84% as compared to category average of 1.48%.
Vanguard Energy (VGENX) seeks capital growth over long run. It invests major portion of its assets in companies whose primary operations are related to the energy sector including exploration, production, and transmission of energy or energy fuels, and in other services like research and energy conservation. The energy mutual fund returned 19.90% in the last one year period.
Karl E. Bandtel is the fund manager and has managed this fund since 2002.
To view the Zacks Rank and past performance of all energy mutual funds, investors click here to see the complete list of funds.
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Read the analyst report on GAAEX
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