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Buy These 3 Top-Ranked Energy Mutual Funds for Excellent Returns

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Oil mutual funds present an attractive opportunity in the current scenario. With global energy demand steadily rebounding, oil prices remain well-supported despite market volatility. Geopolitical tensions, supply constraints from OPEC+ cuts, and underinvestment in new oil projects have created a favorable supply-demand imbalance. At the same time, inflationary pressures make commodities, including oil, a strong hedge against eroding purchasing power.

In an inflationary environment, oil serves as a good hedge. While the long-term trend is toward clean energy, the transition will take decades, ensuring oil remains vital for the global economy. Oil mutual funds offer a way to invest in this critical sector and benefit from strong company earnings, dividends, and share buybacks without the risk of picking individual stocks. For investors seeking growth, diversification, and inflation protection, oil mutual funds offer a timely and strategic investment choice in today’s uncertain economic environment.

Below, we share with you three top-ranked energy mutual funds, viz., Vanguard Specialized Portfolios Energy Fund (VGENX - Free Report) , Fidelity Select Energy Portfolio (FSENX - Free Report)  and T. Rowe Price New Era (PRNEX - Free Report) . Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of energy mutual funds.

Vanguard Specialized Portfolios Energy Fund invests most of its net assets in common stocks of companies that are engaged in the energy industry. VGENX advisors prefer to invest in companies involved in exploration, production, transmission, energy research and conservation and pollution control.

Vanguard Specialized Portfolios Energy Fund has three-year annualized returns of 13.1%. As of April 2025, VGENX held 39 issues, with 8.9% of its assets invested in Shell.

Fidelity Select Energy Portfolio fund invests most of its net assets in common stocks of domestic and foreign companies that are principally engaged in the energy field, including the conventional areas of oil, gas, electricity, and coal, and newer sources of energy such as nuclear, geothermal, oil shale and solar power. FSENX advisors choose to invest in companies based on fundamental analysis factors such as financial condition, industry position, and market and economic conditions.

Fidelity Select Energy Portfolio fund has three-year annualized returns of 7.3%. FSENX has an expense ratio of 0.65%.

T. Rowe Price New Era fund invests the majority of its net assets in common stocks of natural resource companies that have earnings and tangible assets of natural resources companies, which may benefit from periods of increasing inflation. PRNEX advisors also invest in other growth companies that have strong potential for earnings growth.

T. Rowe Price New Era fund has three-year annualized returns of 6.4%. Shinwoo Kim has been the fund manager of PRNEX since June 2021.

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

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