Investors looking for stable current income would do well to consider utility funds. Such funds are used as defensive instruments, which protect investments during a market downturn. This is because the demand for essential services such as those provided by utilities remains unchanged even during difficult times.
In recent years, many funds in this category have increased their exposure to emerging markets and unregulated companies. Though this strategy has increased the risk involved, it has also led to higher returns. Funds from this category have also benefited from the widespread economic slowdown globally and stock market volatility.
Thus, investing in utility mutual funds seems prudent as of now. However, choosing the right mutual funds for your portfolio can become cumbersome. To that end, let us find out which of the two funds discussed below is better.
Wells Fargo Utility and Telecommunications Fund - Class A (EVUAX - Free Report)
This fund invests heavily in common and preferred stocks and investment-grade debt securities of utilities and telecommunications companies. EVUAX also invests around 35% of its assets in convertible debentures of utilities and telecommunications companies.
This Sector - Utilities product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 10.1% over the 3-year and 10.3% of the 5-year period. To see how this fund performed compared in its category, and other #1 and #2 Ranked Mutual Funds, please click here.
Wells Fargo Utility and Telecommunications Fund - Class A, as of the last filing, allocates its assets in the top two major groups; Large Value and Large Growth. Further, as of the last filing, Nextera Energy Inc and Eversource Energy were the top holdings for EVUAX.
This Zacks Mutual Fund Rank #1 (Strong Buy) was incepted in January 1994 and is managed by Wells Fargo. EVUAX carries an expense ratio of 1.14% and requires a minimum initial investment of $1,000.
Franklin Utilities Fund Class A1 (FKUTX - Free Report)
The fund aims for capital growth and current income. It invests the majority of its assets in the equity securities of public utilities companies.
This Sector - Utilities product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 7.2% over the 3-year and 9.4% of the 5-year period. To see how this fund performed compared in its category, and other #1 and #2 Ranked Mutual Funds, please click here.
Franklin Utilities Fund Class A1, as of the last filing, allocates its assets in the top two major groups; Large Value and High Yield Bond. Further, as of the last filing, Nextera Energy Inc. and Dominion Energy PLC were the top holdings of FKUTX.
This Zacks Mutual Fund Rank #1 (Strong Buy) fund was incepted in September 1948 and is managed by Franklin/Temp. FKUTX carries an expense ratio of 0.73% and requires a minimum initial investment of $1,000.
To Conclude
Both EVUAX and FKUTX are buy-rated funds, with each requiring a minimum initial investment of $1,000. However, upon having a closer look, we find that FKUTX is a clear winner. FKUTX’s operating and administrative expenses are much lower than EVUAX. FKUTX also has a history of providing higher returns. Further, FKUTX has a three-year beta of 0.49 compared with EVUAX’s 0.51. So, given the current market scenario, betting on a fund with lower risk and higher returns seems prudent and FKUTX outclasses EVUAX.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Investors looking for stable current income would do well to consider utility funds. Such funds are used as defensive instruments, which protect investments during a market downturn. This is because the demand for essential services such as those provided by utilities remains unchanged even during difficult times.
In recent years, many funds in this category have increased their exposure to emerging markets and unregulated companies. Though this strategy has increased the risk involved, it has also led to higher returns. Funds from this category have also benefited from the widespread economic slowdown globally and stock market volatility.
Thus, investing in utility mutual funds seems prudent as of now. However, choosing the right mutual funds for your portfolio can become cumbersome. To that end, let us find out which of the two funds discussed below is better.
Wells Fargo Utility and Telecommunications Fund - Class A (EVUAX - Free Report)
This fund invests heavily in common and preferred stocks and investment-grade debt securities of utilities and telecommunications companies. EVUAX also invests around 35% of its assets in convertible debentures of utilities and telecommunications companies.
This Sector - Utilities product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 10.1% over the 3-year and 10.3% of the 5-year period. To see how this fund performed compared in its category, and other #1 and #2 Ranked Mutual Funds, please click here.
Wells Fargo Utility and Telecommunications Fund - Class A, as of the last filing, allocates its assets in the top two major groups; Large Value and Large Growth. Further, as of the last filing, Nextera Energy Inc and Eversource Energy were the top holdings for EVUAX.
This Zacks Mutual Fund Rank #1 (Strong Buy) was incepted in January 1994 and is managed by Wells Fargo. EVUAX carries an expense ratio of 1.14% and requires a minimum initial investment of $1,000.
Franklin Utilities Fund Class A1 (FKUTX - Free Report)
The fund aims for capital growth and current income. It invests the majority of its assets in the equity securities of public utilities companies.
This Sector - Utilities product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 7.2% over the 3-year and 9.4% of the 5-year period. To see how this fund performed compared in its category, and other #1 and #2 Ranked Mutual Funds, please click here.
Franklin Utilities Fund Class A1, as of the last filing, allocates its assets in the top two major groups; Large Value and High Yield Bond. Further, as of the last filing, Nextera Energy Inc. and Dominion Energy PLC were the top holdings of FKUTX.
This Zacks Mutual Fund Rank #1 (Strong Buy) fund was incepted in September 1948 and is managed by Franklin/Temp. FKUTX carries an expense ratio of 0.73% and requires a minimum initial investment of $1,000.
To Conclude
Both EVUAX and FKUTX are buy-rated funds, with each requiring a minimum initial investment of $1,000. However, upon having a closer look, we find that FKUTX is a clear winner. FKUTX’s operating and administrative expenses are much lower than EVUAX. FKUTX also has a history of providing higher returns. Further, FKUTX has a three-year beta of 0.49 compared with EVUAX’s 0.51. So, given the current market scenario, betting on a fund with lower risk and higher returns seems prudent and FKUTX outclasses EVUAX.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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