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EVUAX or CSUAX: Which Utilities Mutual Fund Should You Buy?

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Investors with a conservative mindset looking for stable current income would do well to consider utilities funds. They 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 utilities 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, preferred and convertible preferred stocks of utility and telecommunications companies. It also invests up to a fifth of its net assets in dividend-paying equity securities of non-utility and non-telecommunications companies. 

This Sector - Utilities product has a history of positive total returns for over 10 years.  Specifically, the fund’s returns are 9% over the 3-year and 11.5% of the 5-year period. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

Meanhwile, as of the last filing, Nextera Energy Inc and Eversource Energy were the top holdings for Wells Fargo Utility and Telecommunications Fund - Class A.

This Zacks Mutual Fund Rank #2 (Buy) was incepted in January 1994 and is managed by Wells Fargo. EVUAX carries an expense ratio of 1.05% and requires a minimum initial investment of $1,000.

Cohen & Steers Global Infrastructure Fund, Inc. Class A (CSUAX - Free Report)

The fund aims for total return. It invests the lion’s share of its total assets in domestic as well as foreign common stocks and other equity securities that are issued by infrastructure companies, which consist of utilities, pipelines, toll roads, airports, railroads, marine ports, telecommunications companies and other infrastructure companies.

This Sector - Utilities product has a history of positive total returns for over 10 years.  Specifically, the fund’s returns are 4.4% over the 3-year and 7.8% of the 5-year period. To see how this fund performed compared to its category, and other #1 and #2 Ranked Mutual Funds, please click here.   

Meanwhile, as of the last filing, Nextera Energy Inc. and Transurban Group were the top holdings of Cohen & Steers Global Infrastructure Fund, Inc. Class A.

This Zacks Mutual Fund Rank #2 (Buy) fund was incepted in May 2004 and is managed by Cohen & Steers. CSUAX carries an expense ratio of 1.29% and requires a minimum initial investment of $0.

To Conclude

While both EVUAX and CSUAX are buy-rated funds, upon having a closer look we find that EVUAX is a clear winner. Not only are EVUAX’s operating and administrative expenses slightly lower compared CSUAX, EVUAX also has a history of providing higher returns. Furthermore, EVUAX has a three-year beta of 0.44 compared with CSUAX’s 0.57.

Therefore, taking into consideration all the factors, EVUAX should be on your radar as it has a history of providing better returns at marginally lower costs.

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