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Mutual Fund Commentary

Oil prices recovered significantly in recent months, helping the energy sector to emerge as one of the best performers this year. According to Morningstar, the energy mutual fund category has gained nearly 20% in the year-to-date frame. Meanwhile, speculation is rife that major oil producers, both OPEC and non-OPEC, may come into an agreement on reducing oil production to push up oil prices. Moreover, a gradual improvement witnessed in the U.S. economy over recent times may also boost oil demand. In this scenario, investing in energy mutual funds may prove lucrative.

Below we share with you three top-ranked energy mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all energy mutual funds, investors can click here to see the complete list of energy funds.

Fidelity Select Natural Resources Portfolio (FNARX - Free Report) seeks growth of capital. FNARX invests the lion’s share of its assets in securities of companies that are primarily involved in operations related to natural resources. The fund generally invests in common stocks of companies located throughout the globe. FNARX considers factors including financial strength and economic condition before investing in a company. Fidelity Select Natural Resources Portfolio has returned 23.6% over the year-to-date frame.

John Dowd is the portfolio manager of FNARX since 2006.

Vanguard Energy Investor (VGENX - Free Report) invests a major portion of its assets in equity securities of companies from the energy sector. VGENX normally invests in stocks of companies that are engaged in the production, marketing, transmission and research of energy.The fund generally invests in common stocks of companies. Vanguard Energy Investor has returned 25.7% over the year-to-date frame.

VGENX has an expense ratio of 0.37% compared with the category average of 1.50%.

Fidelity Advisor Energy T (FAGNX - Free Report) seeks growth of capital over the long run. FAGNX invests a large chunk of its assets in common stocks of companies engaged in operations related to the energy domain. The fund invests in securities of both U.S. and non-U.S. companies. It is a non-diversified fund and gives precedence to several factors including financial strength and economic condition before selecting a company. Fidelity Advisor Energy T has returned 24.9% over the year-to-date frame.

As of September 2016, FAGNX held 85 issues, with 5.93% of its assets invested in EOG Resources Inc.

To view the Zacks Rank and past performance of all Energy Mutual Funds, investors can click here to see the complete list of funds.

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Fidelity Adv Energy Fund T (FAGNX) - free report >>