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Is Hennessy Gas Utility Index Fund (GASFX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Mutual Fund Equity Report fund might consider looking past Hennessy Gas Utility Index Fund (GASFX - Free Report) . GASFX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

GASFX finds itself in the Hennessy family, based out of Novato, CA. Since Hennessy Gas Utility Index Fund made its debut in May of 1989, GASFX has garnered more than $439.30 million in assets. The fund is currently managed by Ryan Kelley who has been in charge of the fund since March of 2013.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 4.98%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 4.3%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 15.13%, the standard deviation of GASFX over the past three years is 15.9%. The fund's standard deviation over the past 5 years is 13.29% compared to the category average of 12.85%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 0.6, so investors should note that it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. GASFX's 5-year performance has produced a negative alpha of -5.19, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, GASFX is a no load fund. It has an expense ratio of 1.02% compared to the category average of 0.78%. From a cost perspective, GASFX is actually more expensive than its peers.

While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Hennessy Gas Utility Index Fund ( GASFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.

This could just be the start of your research on GASFXin the Mutual Fund Equity Report category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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