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FKUTX or FUGAX: Which one Should You Buy? Let's Find Out
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Investors looking for stable current income would do well to consider utility 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 generated higher returns.
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.
The fund aims for capital growth and current income. It invests the majority of its assets in the equity securities of public utilities companies. Such companies include the ones that provide electricity, natural gas, water, and communications services to the public as well as companies that provide services to public utilities companies.
This Sector - Utilities product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 18.8% over the 1-year and 11.1% of the 3-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 CMS Energy Corp were the top holdings for Franklin Utilities Fund Class A1.
This Zacks Mutual Fund Rank #1 (Strong Buy) was incepted in December 1998 and is managed by Franklin/Temp. FKUTX carries an expense ratio of 0.73% and requires a minimum initial investment of $1,000.
The fund aims for capital appreciation. FUGAX invests the lion’s share of assets in common stocks of companies principally engaged in the utilities industry as well as those companies that derive a majority of their revenues from their utility operations. The fund invests in both U.S. and non-U.S. companies.
This Sector - Utilities product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 24.8% over the 1-year and 10% of the 3-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 Dominion Energy Plc were the top holdings of Fidelity Advisor Utilities Fund Class A.
This Zacks Mutual Fund Rank #2 (Buy) fund was incepted in September 1996 and is managed by Fidelity. FUGAX carries an expense ratio of 1.06% and requires a minimum initial investment of $0.
To Conclude
While both FKUTX and FUGAX are buy-rated funds, upon having a closer look we find that FUGAX is a clear winner. Not only are FUGAX’s operating and administrative expenses slightly lower compared FKUTX, FUGAX also has a history of providing higher returns. Therefore, taking into consideration all the factors, FUGAX should be on your radar as it has a history of providing better returns at marginally lower costs, despite being slightly riskier.
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FKUTX or FUGAX: Which one Should You Buy? Let's Find Out
Investors looking for stable current income would do well to consider utility 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 generated higher returns.
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.
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. Such companies include the ones that provide electricity, natural gas, water, and communications services to the public as well as companies that provide services to public utilities companies.
This Sector - Utilities product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 18.8% over the 1-year and 11.1% of the 3-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 CMS Energy Corp were the top holdings for Franklin Utilities Fund Class A1.
This Zacks Mutual Fund Rank #1 (Strong Buy) was incepted in December 1998 and is managed by Franklin/Temp. FKUTX carries an expense ratio of 0.73% and requires a minimum initial investment of $1,000.
Fidelity Advisor Utilities Fund Class A (FUGAX - Free Report)
The fund aims for capital appreciation. FUGAX invests the lion’s share of assets in common stocks of companies principally engaged in the utilities industry as well as those companies that derive a majority of their revenues from their utility operations. The fund invests in both U.S. and non-U.S. companies.
This Sector - Utilities product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 24.8% over the 1-year and 10% of the 3-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 Dominion Energy Plc were the top holdings of Fidelity Advisor Utilities Fund Class A.
This Zacks Mutual Fund Rank #2 (Buy) fund was incepted in September 1996 and is managed by Fidelity. FUGAX carries an expense ratio of 1.06% and requires a minimum initial investment of $0.
To Conclude
While both FKUTX and FUGAX are buy-rated funds, upon having a closer look we find that FUGAX is a clear winner. Not only are FUGAX’s operating and administrative expenses slightly lower compared FKUTX, FUGAX also has a history of providing higher returns. Therefore, taking into consideration all the factors, FUGAX should be on your radar as it has a history of providing better returns at marginally lower costs, despite being slightly riskier.
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 >>