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Best of Funds

Even during a market downturn, the demand for essential services such as those provided by utilities, remains virtually unchanged. Utilities mutual 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 can offer superior returns at a relatively lower level of risk.

Below we will share with you the 5 best performing utilities mutual funds year to date. To view the Zacks Rank and past performance of all utilities funds, then click here. 

Mutual Fund Zacks Rank  Total Return YTD
Fidelity Select Utilities #1 Strong Buy 6.9%
Fidelity ADV Utilities A #4 Sell 6.8%
Flex-Funds Total Return Utilities # Hold 6.8%
Gabelli Utilities AAA #1 Strong Buy 6.7%
FBR Gas Utility Index # 3 Hold 6.0%

Fidelity Select Utilities (FSUTX) seeks capital growth. The fund invests the majority of its assets in utility companies or those deriving a large share of their revenues from operations in this sector. It is non-diversified and may purchase foreign securities. It may also invest a large share of its assets in a single issuer. It is a no-load fund.

The utilities mutual fund returned 12.92% in the last one year period and has a five year annualized return of 3.29%.

Fidelity Advisor Utilities A (FUGAX - MF report) invests the majority of its assets in public utility companies as well as firms deriving a large share of revenues from related operations. It purchases both domestic and foreign securities. The utilities mutual fund has a five year annualized return of 4.16%.

The utilities mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.26% compared to a category average of 1.40%.

Flex-funds Total Return Utilities (FLRUX - MF report) seeks total return. The fund invests heavily in domestic and foreign utilities companies and firms that provide services to them. At least 25% of its assets are invested in public utility companies. The utilities mutual fund returned 14.39% in the last one year period

As of September 2010, this utilities mutual fund held 39 issues, with 4.76% of its total assets invested in American Water Works Co Inc.

Gabelli Utilities AAA (GABUX) invests at least 80% of its assets in utilities companies. It focuses on firms providing electricity, gas and water services or equipment for these industries. It also invests in the telecom industry and looks to gain from regulation and consolidation in the utilities sector. This utilities mutual fund has a five year annualized return of 4.46%.

Mario J. Gabelli is the fund manager has managed this utilities mutual fund since 1999.

FBR Gas Utility Index Investor (GASFX) seeks both current income and capital growth. The fund seeks to match the performance of the American gas Association Index. It normally invests at least 85% of its assets in common stock of firms which are involved in the distribution and transmission of natural gas.The utilities mutual fund has a ten year annualized return of 4.61%.

The utilities mutual fund has a minimum initial investment of $2,000 and an expense ratio of 0.76% compared to a category average of 1.41%.

To view the Zacks Rank and past performance of all utilities mutual funds, then click here.

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 at http://www.zacks.com/funds/mutualfund/

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