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4 Energy Mutual Funds to Buy as Oil Prices Rally Above $70
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The Energy sector has undoubtedly been one of the best performing sectors so far this year. In fact, the Energy Select Sector SPDR ETF has gained 4.6% year to date. Further, U.S. crude price surged to above $70 a barrel for the first time in a month’s time. Also, U.S. crude inventories declined 9.9 million barrels from the previous week, further pushing oil prices higher.
Moreover, reports that the United States has been urging countries to stop importing oil from Iran by November have been rife. Under such circumstances, investing in energy mutual funds seems prudent.
Oil Prices Touch $70
The energy sector has hit headlines this quarter for various reasons. First, there has been an oil price rally as evident from the nearly 5% rise in in the energy sector in the past six months. On Tuesday, WTI crude increased 3.6% to close at $70.53 a barrel, the highest finish recorded since May 24. Brent crude also gained 2.1% to close at $76.31 a barrel, near a two-week high. Such gains came on the back of multiple factors, boosting supply concerns.
According to a report by The Wall Street Journal, the United States wants all countries to stop importing oil from Iran by Nov 4. This is part of the United States’ efforts to isolate the country economically and politically, per a senior U.S. State Department official.
Major purchasers of Iranian crude were expecting the United States to allow them to reduce such oil imports over an extended period. But the Trump administration has no plans of issuing any waivers for countries that are making efforts to cut Iranian oil imports.
Crude Inventories Dip 9.9 Million Barrels
Per the latest Weekly Petroleum Data for the week ending Jun 22, U.S. crude inventories dipped 9.9 million barrels from the previous week. This came as a pleasant surprise for the space, sending oil prices higher.
Moreover, U.S. crude surged to trade near its highest premium in the last three and a half years. Further, the difference between the front-month futures and September contracts increased to nearly $1.61 in the United States. This was achieved due to backwardation which is caused by a sharp decline in inventories.
4 Best Choices
Given such circumstances, we have highlighted four energy mutual funds that are poised to gain. These funds also carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.
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).
Vanguard Energy Investor (VGENX - Free Report) invests a major portion of its assets in equity securities of companies from the energy sector. VGENX normally invests in stocks of companies that are engaged in the production, marketing, transmission and research of energy. The fund seeks growth of capital for the long run.
This Sector – Energy product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and five-year benchmarks are 4% and 1.6%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
VGENX has an annual expense ratio of 0.38%, which is below the category average of 1.36%.
Columbia Global Energy & Natural Resources Z seeks capital growth for the long run. UMESX invests more than 80% of its assets in securities of domestic and foreign companies. The fund primarily focuses on acquiring securities of companies from natural resources and energy industries.
This Sector – Energy product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and five-year benchmarks are 4.7% and 2.5%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
VGENX has an annual expense ratio of 1.10%, which is below the category average of 1.36%.
Fidelity Advisor Energy T (FAGNX - Free Report) seeks growth of capital over the long run. FAGNX invests a chunk of its assets in common stocks of companies engaged in operations related to the energy domain. The fund invests in securities of both U.S. and non-U.S. companies. It is a non-diversified fund and gives precedence to several factors including financial strength and economic condition before selecting a company.
This Sector – Energy product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and five-year benchmarks are 2% and 1.1%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
FAGNX has an annual expense ratio of 1.35%, which is below the category average of 1.36%.
Fidelity Select Energy (FSENX - Free Report) invests a huge chunk of its assets in securities of companies that are engaged mainly in the energy field. FSENX seeks growth of capital and invests mainly in common stocks. The fund focuses on acquiring securities of both U.S. and non-U.S. companies.
This Sector – Energy product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and five-year benchmarks are 2.8% and 1.7%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
FSENX has an annual expense ratio of 0.78%, which is below the category average of 1.36%.
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4 Energy Mutual Funds to Buy as Oil Prices Rally Above $70
The Energy sector has undoubtedly been one of the best performing sectors so far this year. In fact, the Energy Select Sector SPDR ETF has gained 4.6% year to date. Further, U.S. crude price surged to above $70 a barrel for the first time in a month’s time. Also, U.S. crude inventories declined 9.9 million barrels from the previous week, further pushing oil prices higher.
Moreover, reports that the United States has been urging countries to stop importing oil from Iran by November have been rife. Under such circumstances, investing in energy mutual funds seems prudent.
Oil Prices Touch $70
The energy sector has hit headlines this quarter for various reasons. First, there has been an oil price rally as evident from the nearly 5% rise in in the energy sector in the past six months. On Tuesday, WTI crude increased 3.6% to close at $70.53 a barrel, the highest finish recorded since May 24. Brent crude also gained 2.1% to close at $76.31 a barrel, near a two-week high. Such gains came on the back of multiple factors, boosting supply concerns.
According to a report by The Wall Street Journal, the United States wants all countries to stop importing oil from Iran by Nov 4. This is part of the United States’ efforts to isolate the country economically and politically, per a senior U.S. State Department official.
Major purchasers of Iranian crude were expecting the United States to allow them to reduce such oil imports over an extended period. But the Trump administration has no plans of issuing any waivers for countries that are making efforts to cut Iranian oil imports.
Crude Inventories Dip 9.9 Million Barrels
Per the latest Weekly Petroleum Data for the week ending Jun 22, U.S. crude inventories dipped 9.9 million barrels from the previous week. This came as a pleasant surprise for the space, sending oil prices higher.
Moreover, U.S. crude surged to trade near its highest premium in the last three and a half years. Further, the difference between the front-month futures and September contracts increased to nearly $1.61 in the United States. This was achieved due to backwardation which is caused by a sharp decline in inventories.
4 Best Choices
Given such circumstances, we have highlighted four energy mutual funds that are poised to gain. These funds also carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.
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).
Vanguard Energy Investor (VGENX - Free Report) invests a major portion of its assets in equity securities of companies from the energy sector. VGENX normally invests in stocks of companies that are engaged in the production, marketing, transmission and research of energy. The fund seeks growth of capital for the long run.
This Sector – Energy product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and five-year benchmarks are 4% and 1.6%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
VGENX has an annual expense ratio of 0.38%, which is below the category average of 1.36%.
Columbia Global Energy & Natural Resources Z seeks capital growth for the long run. UMESX invests more than 80% of its assets in securities of domestic and foreign companies. The fund primarily focuses on acquiring securities of companies from natural resources and energy industries.
This Sector – Energy product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and five-year benchmarks are 4.7% and 2.5%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
VGENX has an annual expense ratio of 1.10%, which is below the category average of 1.36%.
Fidelity Advisor Energy T (FAGNX - Free Report) seeks growth of capital over the long run. FAGNX invests a chunk of its assets in common stocks of companies engaged in operations related to the energy domain. The fund invests in securities of both U.S. and non-U.S. companies. It is a non-diversified fund and gives precedence to several factors including financial strength and economic condition before selecting a company.
This Sector – Energy product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and five-year benchmarks are 2% and 1.1%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
FAGNX has an annual expense ratio of 1.35%, which is below the category average of 1.36%.
Fidelity Select Energy (FSENX - Free Report) invests a huge chunk of its assets in securities of companies that are engaged mainly in the energy field. FSENX seeks growth of capital and invests mainly in common stocks. The fund focuses on acquiring securities of both U.S. and non-U.S. companies.
This Sector – Energy product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and five-year benchmarks are 2.8% and 1.7%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
FSENX has an annual expense ratio of 0.78%, which is below the category average of 1.36%.
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 >>