Any investors hoping to find a Sector - Utilities fund might consider looking past Gabelli Utilities AAA (GABUX Quick QuoteGABUX - Free Report) . GABUX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

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

History of Fund/Manager

GABUX finds itself in the Gabelli Funds family, based out of Rye, NY. The Gabelli Utilities AAA made its debut in January of 2002 and GABUX has managed to accumulate roughly $288.33 million in assets, as of the most recently available information. The fund is currently managed by Mario J. Gabelli who has been in charge of the fund since January of 2002.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 5.32%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 6.28%, which places it in the top third during this time-frame.

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. The standard deviation of GABUX over the past three years is 9.08% compared to the category average of 9.42%. Over the past 5 years, the standard deviation of the fund is 9.98% compared to the category average of 9.82%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In GABUX's case, the fund lost 33.48% in the most recent bear market and outperformed its peer group by 9.9%. This means that the fund could possibly be a better choice than its peers during a down market environment.

Investors should note that the fund has a 5-year beta of 0.55, so it is likely going to be less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -0.71, managers in this portfolio find it difficult to pick 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, GABUX is a no load fund. It has an expense ratio of 1.37% compared to the category average of 1.21%. So, GABUX is actually more expensive than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.

Bottom Line

Overall, Gabelli Utilities AAA ( GABUX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and higher fees compared to its peers.

For additional information on this product, or to compare it to other mutual funds in the Sector - Utilities, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.