We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Top 3 Utility Mutual Funds Poised to Benefit From Fed Rate Cut
Read MoreHide Full Article
The Federal Reserve announced a 25-basis-point rate cut for federal funds, which brought the target range down to 3.5% to 3.75% on Wednesday. The economic growth rate has slowed, according to policymakers. The nonfarm payroll sector added 119,000 new positions during September 2025, although the number remained lower than what had been seen in previous months.
The unemployment rate reached 4.4% in September after it had been 4.3% in August. The inflation rate reached 3% during September 2025 after it had been at 2.9% during August. The economic situation has become more unpredictable because of these recent developments.
The current market environment makes utility mutual funds more attractive because their investment performance stays steady during times of economic uncertainty. These utility funds include businesses that operate essential service providers, which include electricity and natural gas and water supply companies that serve both residential and commercial customers beyond market fluctuations. The utility sector maintains dividend payments because its stable cash generation system produces dependable income streams that show minimal impact on market fluctuations.
The Fed announced it would track economic data to determine potential economic threats before it made any changes to its monetary policy. However, the defensive characteristics of utility mutual funds make them an appealing investment option.
We have chosen three utility mutual funds — Franklin Utilities (FKUTX - Free Report) , American Century Utilities Inv (BULIX - Free Report) and Fidelity Telecom and Utilities (FIUIX - Free Report) — that investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.
Franklin Utilities fund invests most of its net assets in equity securities of public utility companies that provide electricity, natural gas, water, and communications services to the public and companies that provide services to public utility companies. FKUTX advisors also invest a relatively small portion of their assets in companies operating in the utility industry.
John Kohli has been the lead manager of FKUTX since Dec. 30, 1998. Most of the fund’s holdings were in companies like NextEra Energy (8.4%), Vistra Corp. (6.2%) and Southern Co (4.3%) as of June 30, 2025.
FKUTX’s 3-year and 5-year returns are 14.9% and 11.9%, respectively. The annual expense ratio is 0.71%. FKUTX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
American Century Utilities Inv fund invests most of its assets in equity securities of utility companies. BULIX advisors use both quantitative and qualitative approaches, along with risk management strategies, to build the fund portfolio.
Yulin Long has been the lead manager of BULIX since Dec. 31, 2010. Most of the fund’s holdings were in Nextera Energy (8.5%), Duke Energy Corp (8.4%), and Vistra Corp. (6.9%) as of June 30, 2025.
BULIX’s 3-year and 5-year annualized returns are 13.5% and 9.3%, respectively. Its net expense ratio is 0.65%. BULIX has a Zacks Mutual Fund Rank #1.
Fidelity Telecom and Utilities fund seeks high total return through a combination of current income and capital appreciation. FIUIX invests primarily in common stocks with at least 80% of assets in securities of utility companies.
Nicole Abernethy has been the lead manager of FIUIX since Dec. 5, 2024. Most of the fund’s holdings were in Verizon Communications Inc. (12.3%), Nextera Energy (8.8%) and Constellation Energy (7.5%)as of July 31, 2025.
FIUIX’s 3-year and 5-year annualized returns are 17.2% and 13.6%, respectively. Its net expense ratio is 0.66%. FIUIX has a Zacks Mutual Fund Rank #2.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Top 3 Utility Mutual Funds Poised to Benefit From Fed Rate Cut
The Federal Reserve announced a 25-basis-point rate cut for federal funds, which brought the target range down to 3.5% to 3.75% on Wednesday. The economic growth rate has slowed, according to policymakers. The nonfarm payroll sector added 119,000 new positions during September 2025, although the number remained lower than what had been seen in previous months.
The unemployment rate reached 4.4% in September after it had been 4.3% in August. The inflation rate reached 3% during September 2025 after it had been at 2.9% during August. The economic situation has become more unpredictable because of these recent developments.
The current market environment makes utility mutual funds more attractive because their investment performance stays steady during times of economic uncertainty. These utility funds include businesses that operate essential service providers, which include electricity and natural gas and water supply companies that serve both residential and commercial customers beyond market fluctuations. The utility sector maintains dividend payments because its stable cash generation system produces dependable income streams that show minimal impact on market fluctuations.
The Fed announced it would track economic data to determine potential economic threats before it made any changes to its monetary policy. However, the defensive characteristics of utility mutual funds make them an appealing investment option.
We have chosen three utility mutual funds — Franklin Utilities (FKUTX - Free Report) , American Century Utilities Inv (BULIX - Free Report) and Fidelity Telecom and Utilities (FIUIX - Free Report) — that investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.
Franklin Utilities fund invests most of its net assets in equity securities of public utility companies that provide electricity, natural gas, water, and communications services to the public and companies that provide services to public utility companies. FKUTX advisors also invest a relatively small portion of their assets in companies operating in the utility industry.
John Kohli has been the lead manager of FKUTX since Dec. 30, 1998. Most of the fund’s holdings were in companies like NextEra Energy (8.4%), Vistra Corp. (6.2%) and Southern Co (4.3%) as of June 30, 2025.
FKUTX’s 3-year and 5-year returns are 14.9% and 11.9%, respectively. The annual expense ratio is 0.71%. FKUTX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
American Century Utilities Inv fund invests most of its assets in equity securities of utility companies. BULIX advisors use both quantitative and qualitative approaches, along with risk management strategies, to build the fund portfolio.
Yulin Long has been the lead manager of BULIX since Dec. 31, 2010. Most of the fund’s holdings were in Nextera Energy (8.5%), Duke Energy Corp (8.4%), and Vistra Corp. (6.9%) as of June 30, 2025.
BULIX’s 3-year and 5-year annualized returns are 13.5% and 9.3%, respectively. Its net expense ratio is 0.65%. BULIX has a Zacks Mutual Fund Rank #1.
Fidelity Telecom and Utilities fund seeks high total return through a combination of current income and capital appreciation. FIUIX invests primarily in common stocks with at least 80% of assets in securities of utility companies.
Nicole Abernethy has been the lead manager of FIUIX since Dec. 5, 2024. Most of the fund’s holdings were in Verizon Communications Inc. (12.3%), Nextera Energy (8.8%) and Constellation Energy (7.5%)as of July 31, 2025.
FIUIX’s 3-year and 5-year annualized returns are 17.2% and 13.6%, respectively. Its net expense ratio is 0.66%. FIUIX has a Zacks Mutual Fund Rank #2.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>