As the global appetite for energy continues to increase rapidly, governments and corporations alike are devoting greater resources for the discovery of new energy sources as well as the development of more efficient technology in this domain. In fact, newer economic powerhouses such as China are discovering that the going is even tougher for them. Prices of these invaluable resources continue to rise at a steady rate and the energy sector is clearly a lucrative investment option. Mutual funds are a superior option for forays into the industry as they reduce risks involved by holding widely diversified portfolios.
Below we will share with you 5 top rated energy mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all energy funds, investors can click here to see the complete list of funds .
Waddell & Reed Energy A (WEGAX) seeks capital appreciation over long run. It invests a lion's share of its assets in companies whose primary operations include exploration, discovery, production and distribution of energy and alternative energy sources. It may invest all of its assets in non U.S. firms. It invests in both value and growth stocks of companies all over the globe including those from emerging countries. This energy mutual fund has a one-year return of 29.93%. This fund has an expense ratio of 1.66% as compared to category average of 1.46%.
Fidelity Select Energy Service Portfolio (FSESX) invests majority of its assets in companies involved in operations related to the conventional areas of oil, gas, electricity and alternative source of energy such as nuclear, geothermal, and solar power. It focuses in acquiring common stocks of companies through out the world depending on factors such as financial strength and market condition. This non-diversified energy mutual fund has a one year return of 26.94%.
Ben Shuleva is the fund manager and has managed this fund since 2013.
Ivy Energy A (IEYAX) seeks capital growth. It invests a large portion of its assets in companies having their presence in the energy sector. It may also invest in other energy related companies such as oil, refinery and energy conservation firms. This energy mutual fund has a one-year return of 29.37%.
As of March 2014, this fund held 65 issues with 4.54% of its assets invested in Schlumberger NV.
Invesco Energy Investor (FSTEX) invests major portion of its assets in companies related to the energy industry. It may also invest in derivatives or instruments whose economic nature is similar to these energy companies. It focuses on acquiring common stocks of these companies. This energy mutual fund has a one-year return of 22.91%.
This fund has an expense ratio of 1.15% as compared to category average of 1.46%.
Fidelity Select Natural Gas Portfolio (FSNGX) seeks long term capital growth. It invests largely in companies whose primary operations are related to production, distribution and exploration of natural gas. It invests in common stocks of both U.S. and non U.S. companies. This non-diversified energy mutual fund has a one year return of 31.83%.
Ted Davis is the fund manager and has managed this fund since 2012.
To view the Zacks Rank and past performance of all energy mutual funds, investors can click here to see the complete list of funds .
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 in our Mutual Fund Center .View All Zacks #1 Ranked Mutual Funds
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportGet Your Free (WEGAX): Fund Analysis ReportGet Your Free (FSESX): Fund Analysis ReportGet Your Free (IEYAX): Fund Analysis ReportGet Your Free (FSTEX): Fund Analysis ReportGet Your Free (FSNGX): Fund Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research