Top 5 Energy Mutual Funds (March 2011)

By Mar 8, 2011, 10:29 AM Author's Blog  

Oil prices have only just recorded a two-year high, soaring clear of the hundred dollar per barrel mark. This is a result of tensions intensifying in Libya, and the ongoing conflict is threatening to derail the nascent US economic recovery. Meanwhile, the demand for energy continues to rise steadily and this is particularly true of nations growing at a rapid pace such as China and India. With the advantages of professional management and well diversified portfolios mutual funds are the most viable route to invest in this sector.

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.

Fidelity Select Energy (FSENX) seeks capital growth. It invests the majority of its assets in equity securities of companies whose principal operations are related to the energy sector. The fund invests in both conventional and alternative energy companies. The energy mutual fund returned 34.24% over the last one year period.

As of December 2010, this energy mutual fund held 65 issues, with 17.10% of its total assets invested in ExxonMobil Corporation.

Invesco Energy (FSTEX) utilizes a large proportion of its assets to purchase securities of energy companies. This includes companies which produce or distribute conventional energy, as well as energy conservation and alternative energy companies. This energy mutual fund has a five year annualized return of 6%.

The fund manager is Andrew Lees and he has managed this energy mutual fund since 2008.

Ivy Energy A (IEYAX) seeks capital appreciation over the long term. The fund invests at least 80% of its assets in securities issued by energy companies. Companies engaged in exploration, discovery, production and distribution of energy constitute the fund’s major investments. The energy mutual fund returned 33.46% over the last one year period.

The energy mutual fund has a minimum initial investment of $500 and an expense ratio of 1.60% compared to a category average of 1.89%.

Franklin Natural Resources A (FRNRX) invests the majority of its assets in equity and debt securities of natural resources companies. The fund may invest heavily in small-cap companies. Up to 50% of its assets may be invested in foreign securities. This energy mutual fund returned 41.58% over the last one year period and has a ten year annualized return of 12.58%.

The fund manager is Frederick Fromm and he has managed this energy mutual fund since 2003.

Putnam Global Natural Resources A (EBERX) seeks capital growth. The fund primarily invests in common stocks of energy and natural resources companies across the world. It focuses on acquiring value stocks and invests in large and mid-cap companies. The energy mutual fund returned 29.38% over the last one year period.

The energy mutual fund has a minimum initial investment of $500 and an expense ratio of 1.39% compared to a category average of 1.51%.

To view the Zacks Rank and past performance of all energy mutual funds, then click here.

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