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.

Rydex Energy Services ( RYVIX - MF report ) invests the majority of its assets in equity securities traded in U.S. markets and derivatives from the energy services sector. The fund focuses on investing in small and mid-cap companies from the sector. The energy mutual fund is non-diversified and has a three year annualized return of 6.59%.

The fund manager is Michael P. Byrum and he has managed this energy mutual fund since 1998.

Franklin Natural Resources A ( FRNRX - MF report ) seeks high total return. The fund invests a large share of its assets in equity and debt securities of natural resources companies. The fund may invest heavily in small-cap companies. It focuses on acquiring equity securities, especially common stock. The energy mutual fund has a three year annualized return of 6.12%.

The energy mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.03% compared to a category average of 1.45%.

Nuveen Tradewinds Global Resources A ( NTGAX - MF report ) invests the majority of its assets in equity securities of energy and natural resources companies worldwide. Not more than 40% of its assets may be utilized to purchase foreign equity securities. The energy mutual fund has a three year annualized return of 0.84%.

As of July 2012, this energy mutual fund held 54 issues, with 4.18% of its total assets invested in Kinross Gold Corporation.

Invesco Energy ( FSTEX - MF report ) seeks long term capital growth. The fund utilizes a large proportion of its assets to purchase securities issued by companies with strong linkages to the energy sector. It focuses on acquiring equity securities and may invest all its assets in foreign securities. The energy mutual fund has a three year annualized return of 4.31%.

The fund manager is Andrew Lees and he has managed this energy mutual fund since 2008.

Ivy Global Natural Resources A ( IGNAX - MF report ) invests the majority of its assets in equity securities of companies, whose primary operations are related to natural resources, including suppliers and service providers. The fund focuses on investing in foreign firms or domestic firms whose primary operations are conducted abroad. The energy mutual fund has a three year annualized return of -.55%.

The energy mutual fund has a minimum initial investment of $500 and an expense ratio of 1.41% compared to a category average of 1.45%.

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.