Utilities funds are an excellent choice for investors seeking a steady income flow. They are also used as defensive instruments, which protect investments during a market downturn. This is because the demand for essential services such as those provided by utilities remains unchanged even during difficult times. In recent years, many funds in this category have increased their exposure to emerging markets and unregulated companies. This has increased the risk involved but has also generated higher returns.
Below we will share with you 5 top rated utilities mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all utilities funds, then click here.
MFS Utilities A (MMUFX - Free Report) seeks total return. It invests the majority of its assets is securities issued by companies from the utilities sector. It focuses on purchasing equity securities but may also purchase debt instruments. Most of the debt securities held are rated investment grade, but the fund may also consider investing in securities of lower quality. This utilities mutual fund has a three year annualized return of 3.59%.
The fund manager is Maura A. Shaughnessy and she has managed this utilities mutual fund since 1992.
Invesco Utilities Investor (FSTUX) invests a large share of its assets in stocks of companies in the utilities sector or related industries. Firms engaged in the production and distribution of gas and electricity as well as those providing telecom services constitutes its major investments. This utilities mutual fund returned 16.84% over the last one year period.
The utilities mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.45% compared to a category average of 1.39%.
Vanguard Utilities Index Admiral Shares (VUIAX - Free Report) seeks to track the performance of the MSCI U.S. Investable Market Utilities Index. This is index consists of companies in the utilities sector regardless of their market capitalization. The utilities mutual fund has a five year annualized return of 3.46%.
As of June 2011, this utilities mutual fund held 85 issues, with 6.56% of its total assets invested in Southern Company.
ProFunds Utilities UltraSector (UTPIX - Free Report) invests in stocks and derivatives that provide 150% of the daily return of the Dow Jones U.S. Utilities Index. The balance of the fund’s assets are utilised to purchase money market securities. The utilities mutual fund has returned 21.88% over the last one year period.
Hratch S. Najarian is the fund manager and he has managed this utilities mutual fund since 2011.
Franklin Utilities A (FKUTX - Free Report) seeks current income and capital growth. The fund concentrates on purchasing equity in public utilities companies. More than 25% of its assets are invested in companies that provide electricity, gas, water and communication services. The utilities mutual fund has a ten year annualized return of 7.47%.
The utilities mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.78% compared to a category average of 1.39%.
To view the Zacks Rank and past performance of all utilities mutual funds, then click here.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at https://www.zacks.com/funds.