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Mutual Fund Commentary

Energy mutual funds offer an attractive opportunity to investors with a long term horizon since they represent a stable industry with a bright future. The demand for energy continues to rise steadily and this is particularly true of nations growing at a rapid pace such as China and India. Along with this trend, the pressure on natural resources which are harnessed to provide energy and related services has also increased considerably. With the advantages of professional management and well diversified portfolios mutual funds are the most viable route to invest in this sector.

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.

JHancock2 Natural Resources 1 (JINRX - MF report) seeks total return over the long term. The fund invests a large share of its assets in equity and related securities of companies across the world whose primary operations involve natural resources. The energy mutual fund has a three year annualized return of 1.62%.

The energy mutual fund has an expense ratio of 1.12% compared to a category average of 1.45%.

BlackRock Energy & Resources (SSGRX - MF report) invests the majority of its assets in energy and natural resources firms worldwide. The fund also invests in companies in related sectors as well as in utilities. It focuses on investing in smaller firms but may also invest in companies of larger sizes. The energy mutual fund has a three year annualized return of 4.41%.

As of August 2012, this energy mutual fund held 154 issues, with 6.67% of its total assets invested in Plains Exploration & Production Company.

Vanguard Energy (VGENX - MF report) seeks capital growth over the long term. The fund utilizes the majority of its assets to purchase common stocks of companies whose primary activities are energy related, including energy conservation and pollution control. The energy mutual fund has a three year annualized return of 6.88%.

The fund manager is Karl E. Bandtel and he has managed this energy mutual fund since 2002.

ProFunds UltraSector Oil & Gas Investor (ENPIX - MF report) invests heavily in equity and related securities of companies across the world whose primary operations involve natural resources. The fund selects firms which are expected to gain from increasing demand for natural resources. This energy mutual fund has a three year annualized return of 14.32%.

The energy mutual fund has a minimum initial investment of $15,000 and an expense ratio of 1.63% compared to a category average of 1.61%.

Ivy Energy A (IEYAX - MF report) seeks capital appreciation. The fund invests large share of its assets in securities issued by energy companies. Companies engaged in exploration, discovery, production and distribution of energy constitute the fund’s major investments. The energy mutual fund has a three year annualized return of 7.56%.

The fund manager is David P. Ginther and he has managed this energy mutual fund since 2006.

To view the Zacks Rank and past performance of all energy 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.

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