Markets

3 Top Ranked Utilities Mutual Funds to Outperform - Mutual Fund Commentary

Even during a market downturn, the demand for essential services such as those provided by utilities, remains virtually unchanged. Utilities funds are therefore an excellent choice for investors seeking a steady income flow through consistent yields from dividends. This is also why they are primarily considered to be a relatively more conservative investment option. In recent times their forays into emerging markets have led to appreciably higher returns and they offer superior returns at a relatively lower level of risk.

Below we will share with you 3 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, investors can click here to see the complete list of funds .

Fidelity Select Utilities Portfolio (FSUTX) seeks capital growth over the long run. It invests a majority of its assets in utility companies or those deriving a large share of their revenues from operations in this sector. The fund focuses in acquiring common stocks. Factors such as financial strength and economic conditions are considered to invest in companies throughout the world. The non-diversified utilities mutual fund has a three year annualized return of 18.6%.

The utilities mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.80% compared to a category average of 1.20%.

Vanguard Utilities Index Admiral (VUIAX) tracks the performance of MSCI US Investable Market Index (IMI)/Utilities 25/50 by using an indexing investment approach. It seeks to perform in line with the benchmarks index's performance and invests all its assets in stocks that constitute the index. This index consists of companies from the utilities sector regardless of their market capitalization. The non-diversified utilities mutual fund has a three year annualized return of 14.7%.

The fund manager is Michael D. Eyre and he has managed this utilities mutual fund since 2010.

Fidelity Advisor Utilities A (FUGAX) seeks long-term capital growth. It invests a lion's share of its assets in companies involved in utilities sector or whose operations are related to the sector. It considers the factors including industry and market conditions to invest in companies all over the globe. The non-diversified utilities mutual fund has a three year annualized return of 14.7%.

As of June 2014, this utilities mutual fund held 32 issues, with 9.9% of its total assets invested in NextEra Energy Inc.

To view the Zacks Rank and past performance of all utilities 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 .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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