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Dow Hits New All-Time High to Begin 2nd Half: 3 Utility Funds to Grab
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Wall Street has been seeing volatility over the past two weeks as a sharp sell-off in technology stocks rattled the markets. Despite that weakness, the Dow has continued to outperform, with the blue-chip index reaching a fresh record closing high on Thursday.
Following an impressive first half of 2026, the Dow carried its momentum into the second half of the year. Investors have increasingly shifted toward defensive stocks as concerns over AI-driven technology shares sparked a broader rotation out of the sector.
Amid this positive sentiment, investors may consider utility funds like American Century Utilities Inv (BULIX - Free Report) , Franklin Utilities Fund (FKUTX - Free Report) and Fidelity Utilities Fund (FIUIX - Free Report) .
Dow Extends Its Winning Streak
The Dow climbed 594.83 points, or 1.1%, to finish at a record high of 52,900.07 on Thursday. The milestone came on the second trading day of the year's second half and marked the index's 21st record close of 2026.
While the Nasdaq has struggled due to a broad technology selloff, the Dow has continued to advance as investors rotate out of AI-related stocks and favor more defensive investments. Growing concerns about the sustainability of AI-driven valuations have weakened confidence in the technology sector.
The blue-chip index came under pressure earlier this year after the U.S.-Iran conflict escalated in late February. However, easing geopolitical tensions over the past month have pushed global oil prices lower, providing support to the broader market.
Robust earnings reported by several major companies during the first two quarters also helped fuel the Dow's rally throughout the first half of the year.
The index gained 8.9% during the first six months of 2026, marking its strongest first-half performance since 2021. It is now up nearly 10.1% year to date after posting an almost 13% gain in 2025.
As the conflict involving Iran appears to be nearing an end, inflation is expected to moderate. Until recently, rising oil prices had prompted the Federal Reserve to consider raising interest rates later this year. However, those concerns eased earlier this week after the central bank indicated that inflation could begin to cool in the coming months.
3 Best Choices
We've identified three utility mutual funds that have demonstrated impressive annualized returns over 3-year and 5-year periods. These funds also hold a Zacks Mutual Fund Rank of #1 (Strong Buy) or 2 (Buy), require an initial investment of no more than $5,000 and have a low expense ratio.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
American Century Utilities Inv fund seeks current income and long-term capital growth. BULIX mainly invests 80% of its assets in stocks of companies engaged in the utilities industry. Within this 80% category, the managers will not buy shares of a company unless 50% or more of its revenues or net profits come from the ownership or operation of facilities used to provide electricity, natural gas, telecommunications services, cable television, water or sanitary services.
BULIX’s 3-year and 5-year annualized returns are 15.7% and 8.5%, respectively. American Century Utilities Invfund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.66%, which is lower than the category average of 0.99%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Franklin Utilities Fund seeks capital appreciation and current income. FKUTX invests at least 80% of its net assets in securities of public utilities. Franklin Utilities Fund invests more than 25% of its total assets in companies operating in the utilities industry. The manager expects more than 50% of the fund's assets to be invested in electric utilities securities.
FKUTX’s 3-year and 5-year annualized returns are 16.7% and 11.1%, respectively. Franklin Utilities Fund has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.70%, which is lower than its category average of 0.94%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Utilities fund seeks high total return through a combination of current income and capital appreciation. FIUIX normally invests primarily in common stocks with at least 80% of assets in securities of utility companies.
FIUIX’s 3-year and 5-year annualized returns are 18.7% and 11.8%, respectively. Fidelity Select Utilities fund has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.66%, which is lower than its category average.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
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Dow Hits New All-Time High to Begin 2nd Half: 3 Utility Funds to Grab
Wall Street has been seeing volatility over the past two weeks as a sharp sell-off in technology stocks rattled the markets. Despite that weakness, the Dow has continued to outperform, with the blue-chip index reaching a fresh record closing high on Thursday.
Following an impressive first half of 2026, the Dow carried its momentum into the second half of the year. Investors have increasingly shifted toward defensive stocks as concerns over AI-driven technology shares sparked a broader rotation out of the sector.
Amid this positive sentiment, investors may consider utility funds like American Century Utilities Inv (BULIX - Free Report) , Franklin Utilities Fund (FKUTX - Free Report) and Fidelity Utilities Fund (FIUIX - Free Report) .
Dow Extends Its Winning Streak
The Dow climbed 594.83 points, or 1.1%, to finish at a record high of 52,900.07 on Thursday. The milestone came on the second trading day of the year's second half and marked the index's 21st record close of 2026.
While the Nasdaq has struggled due to a broad technology selloff, the Dow has continued to advance as investors rotate out of AI-related stocks and favor more defensive investments. Growing concerns about the sustainability of AI-driven valuations have weakened confidence in the technology sector.
The blue-chip index came under pressure earlier this year after the U.S.-Iran conflict escalated in late February. However, easing geopolitical tensions over the past month have pushed global oil prices lower, providing support to the broader market.
Robust earnings reported by several major companies during the first two quarters also helped fuel the Dow's rally throughout the first half of the year.
The index gained 8.9% during the first six months of 2026, marking its strongest first-half performance since 2021. It is now up nearly 10.1% year to date after posting an almost 13% gain in 2025.
As the conflict involving Iran appears to be nearing an end, inflation is expected to moderate. Until recently, rising oil prices had prompted the Federal Reserve to consider raising interest rates later this year. However, those concerns eased earlier this week after the central bank indicated that inflation could begin to cool in the coming months.
3 Best Choices
We've identified three utility mutual funds that have demonstrated impressive annualized returns over 3-year and 5-year periods. These funds also hold a Zacks Mutual Fund Rank of #1 (Strong Buy) or 2 (Buy), require an initial investment of no more than $5,000 and have a low expense ratio.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
American Century Utilities Inv fund seeks current income and long-term capital growth. BULIX mainly invests 80% of its assets in stocks of companies engaged in the utilities industry. Within this 80% category, the managers will not buy shares of a company unless 50% or more of its revenues or net profits come from the ownership or operation of facilities used to provide electricity, natural gas, telecommunications services, cable television, water or sanitary services.
BULIX’s 3-year and 5-year annualized returns are 15.7% and 8.5%, respectively. American Century Utilities Invfund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.66%, which is lower than the category average of 0.99%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Franklin Utilities Fund seeks capital appreciation and current income. FKUTX invests at least 80% of its net assets in securities of public utilities. Franklin Utilities Fund invests more than 25% of its total assets in companies operating in the utilities industry. The manager expects more than 50% of the fund's assets to be invested in electric utilities securities.
FKUTX’s 3-year and 5-year annualized returns are 16.7% and 11.1%, respectively. Franklin Utilities Fund has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.70%, which is lower than its category average of 0.94%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Utilities fund seeks high total return through a combination of current income and capital appreciation. FIUIX normally invests primarily in common stocks with at least 80% of assets in securities of utility companies.
FIUIX’s 3-year and 5-year annualized returns are 18.7% and 11.8%, respectively. Fidelity Select Utilities fund has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.66%, which is lower than its category average.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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 >>