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Even during difficult economic conditions, the demand for essential services such as utilities remains more or less constant. This is why utilities funds are an excellent choice for investors who are seeking a steady income flow through consistent yields from dividends. In fact, investments in this sector are usually considered to be a conservative investment option. Moreover, in the past utilities funds have ventured into emerging markets and provided appreciably higher returns at relatively lower levels 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.
Putnam Global Utilities A (PUGIX - MF report) seeks current income and capital appreciation. The fund 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 7.63%.
Michael R. Yogg is the fund manager and he has managed this utilities mutual fund since 2000.
Invesco Utilities Investor (FSTUX - MF report) invests a large share 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 16.07%.
As of December 2011, this utilities mutual fund held 39 issues, with 5.29% of its total assets invested in Southern Co.
Vanguard Utilities Index Admiral Shares (VUIAX - MF report) seeks to track the performance of the MSCI U.S. Investable Market Utilities Index. This index consists of companies in the utilities sector regardless of their market capitalization. The utilities mutual fund is non-diversified and has a three year annualized return of 16.83%.
The utilities mutual fund has an expense ratio of 0.19% compared to a category average of 1.36%.
Fidelity Advisor Utilities A (FUGAX - MF report) invests the majority of its assets in public utility companies as well as those firms which derive a large share of revenues from related operations. It focuses on acquiring common stocks of both domestic and foreign companies. The utilities mutual fund has a three year annualized return of 17.29%.
Douglas Simmons is the fund manager and he has managed this utilities mutual fund since 2006.
Rydex Utilities (RYAUX) seeks capital appreciation. The fund invests the majority of its assets in utilities companies whose securities are traded in the US. It focuses on purchasing equity securities and may also invest in derivatives. The utilities mutual fund has a three year annualized return of 17.27%.
The utilities mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.87% compared to a category average of 1.36%.
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 at http://www.zacks.com/funds.