Top 5 Energy Mutual Funds (March 2011)

Two major developments have been dominating the news for some time now and both illustrate the extent to which energy influences the fortunes of economies worldwide. While the conflict in Libya has created oil supply concerns leading to spiraling crude prices and worldwide panic, the Japanese nuclear crisis has created a gap in energy requirements for that nation and forced other countries to reevaluate their plans to generate nuclear power. Energy stocks have been propelled higher as a result and mutual funds are the best vehicle to capture this momentum at appreciably lower levels of risk.

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.

Rydex Energy Services (RYVIX) invests at least 80% of its assets in equity securities of domestic energy services companies. The fund may also utilize derivatives to fulfill its investment objectives. The energy mutual fund returned 44.66% over the last one year period and has a five year annualized return of 7.99%.

The energy mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.38% compared to a category average of 1.89%.

U.S. Global Investors Global Resources (PSPFX) seeks capital appreciation and protection of capital against inflation and currency fluctuations. The majority of its assets are invested in securities of companies from the natural resources sector. The energy mutual fund has a five year annualized return of 7.98%.

As of December 2010, this energy mutual fund held 111 issues, with 7.64% of its total assets invested in Triparty Credit Suisse First Boston.

BlackRock Energy & Resources (SSGRX) invests a large share of its assets in energy and natural resources firms worldwide. It also invests in companies in related sectors as well as in utilities. This energy mutual fund returned 36.48% over the last one year and has a ten year annualized return of 20.25%.

The fund manager is Daniel J. Rice, III and he has managed this energy mutual fund since 2005.

Vanguard Energy (VGENX) seeks long term capital appreciation. The majority of its assets are used to purchase common stocks of companies whose primary activities are energy related, including energy conservation and pollution control. The fund may invest all of its assets in foreign equity securities. This energy mutual fund has a ten year annualized return of 15.77%.

The energy mutual fund has an expense ratio of 0.38% compared to a category average of 1.89%.

Ivy Global Natural Resources A (IGNAX) invests heavily in equity securities of companies, whose primary operations are related to natural resources, including suppliers and service providers. The fund seeks international diversification by investing in foreign firms or in domestic companies with large foreign operations. This energy mutual fund returned 31.53% over the last one year period.

The fund manager is Fred Sturm and he has managed this energy mutual fund since 1997.

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

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