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Is Hennessy Gas Utility Investor (GASFX) a Strong Mutual Fund Pick Right Now?

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There are plenty of choices in the Index category, but where should you start your research? Well, one fund that you should consider investigating is Hennessy Gas Utility Investor (GASFX - Free Report) . GASFX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

Hennessy is based in Novato, CA, and is the manager of GASFX. Since Hennessy Gas Utility Investor made its debut in May of 1989, GASFX has garnered more than $445.34 million in assets. The fund's current manager, Ryan C. Kelley, has been in charge of the fund since March of 2013.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 13%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.48%, which places it in the middle third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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. GASFX's standard deviation over the past three years is 14.62% compared to the category average of 14.98%. Looking at the past 5 years, the fund's standard deviation is 15.02% compared to the category average of 14.62%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. GASFX has a 5-year beta of 0.6, which means it is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a positive alpha of 2.27, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, GASFX is a no load fund. It has an expense ratio of 0.99% compared to the category average of 0.96%. Looking at the fund from a cost perspective, GASFX is actually more expensive than its peers.

Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment has no minimum amount.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, even with its comparatively strong performance, average downside risk, and higher fees, Hennessy Gas Utility Investor ( GASFX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.

This could just be the start of your research on GASFX in the Index category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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