Sector - Utilities fund seekers should consider taking a look at Franklin Utilities A1 (FKUTX Quick QuoteFKUTX - Free Report) . FKUTX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

FKUTX is classified in the Sector - Utilities segment by Zacks, an area full of potential. Sector - Utilities mutual funds focus on companies that provide essential services such as electric power, gas distribution, and water supply to millions of people on a daily basis. Overall, the utility industry is known for its stability and reduced volatility.

History of Fund/Manager

Franklin is based in San Mateo, CA, and is the manager of FKUTX. The Franklin Utilities A1 made its debut in September of 1948 and FKUTX has managed to accumulate roughly $3.53 billion in assets, as of the most recently available information. The fund's current manager, John Kohli, has been in charge of the fund since December of 1998.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 12.78%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 15.38%, which places it in the top 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. Compared to the category average of 12.24%, the standard deviation of FKUTX over the past three years is 14.04%. The fund's standard deviation over the past 5 years is 15.86% compared to the category average of 13.6%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.59, the fund is likely to be less volatile than the market average. 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. The fund has produced a positive alpha over the past 5 years of 2.32, which shows that 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, FKUTX is a load fund. It has an expense ratio of 0.71% compared to the category average of 0.95%. So, FKUTX is actually cheaper than its peers from a cost perspective.

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

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

Bottom Line

Overall, Franklin Utilities A1 ( FKUTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Franklin Utilities A1 ( FKUTX ) looks like a good 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 FKUTX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.