If you've been stuck searching for Sector - Utilities funds, you might want to consider passing on by Gabelli Utilities AAA (GABUX Quick QuoteGABUX - Free Report) as a possibility. GABUX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify GABUX in the Sector - Utilities category, an area that is rife with possible choices. Sector - Utilities funds focus their investments on firms that provide essential daily services to millions of people like electric power, gas distribution, and water supply. All in all, the utility industry is a perfect fit for those investors looking for stability and low volatility.

History of Fund/Manager

GABUX finds itself in the Gabelli Funds family, based out of Rye, NY. The Gabelli Utilities AAA made its debut in January of 2002 and GABUX has managed to accumulate roughly $270.92 million in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 6.82%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 7.98%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of GABUX over the past three years is 13.34% compared to the category average of 14.92%. Looking at the past 5 years, the fund's standard deviation is 11.64% compared to the category average of 12.61%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.54, so it is likely going to be less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. GABUX's 5-year performance has produced a negative alpha of -2.35, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, GABUX is a no load fund. It has an expense ratio of 1.37% compared to the category average of 1.23%. Looking at the fund from a cost perspective, GABUX is actually more expensive than its peers.

This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Gabelli Utilities AAA ( GABUX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, Gabelli Utilities AAA ( GABUX ) looks like a poor potential choice for investors right now.

For additional information on the Sector - Utilities area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into GABUX too for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.