The conservative investor seeking steady interest and dividend income would do well to opt for utilities funds. This category of funds is widely seen as a defensive option since the demand for utility services remains unaffected by market conditions. In addition, most organisations in the sector enjoy a local monopoly, which ensures their viability over the long term. With the advantages of professional management, mutual funds are an ideal option for investing in this sector.
Below we will share with you the 5 best performing utilities mutual funds year to date.
Flex-funds Total Return Utilities (FLRUX) invests the majority of its assets in securities domestic or foreign utility firms, as well as service providers to these companies. At least 25% of the fund’s assets are invested in public utility companies. It also invests in firms deriving half or more of their revenues by providing services or equipment to utility firms. The fund returned 22.97% in the last one year period and has a ten year annualized return of 2.89%.
Lowell Glaser Miller is the fund manager has managed this utilities mutual fund since 1995.
MFS Utilities A (MMUFX) 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 2.03%.
The utilities mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.07% compared to a category average of 1.43%.
Gabelli Utilities AAA (GABUX) invests at least 80% of its assets in utilities companies. It focuses on firms providing electricity, gas and water services or equipment for these industries. It also invests in the telecom industry and looks to gain from regulation and consolidation in the utilities sector. This utilities mutual fund has a five year annualized return of 6.42%.
As of December 2010, this utilities mutual fund held 218 issues, with 5.68% of its total assets invested in National Fuel Gas Company.
Fidelity Select Utilities (FSUTX) seeks capital growth. The fund invests primarily in utility companies or those deriving a large share of their revenues from operations in this sector. It is non-diversified and may purchase foreign securities. It may also invest a large share of its assets in a single issuer. It is a no-load fund.
The utilities mutual fund returned 22.04% in the last one year period and has a five year annualized return of 3.78%.
Fidelity Advisor Utilities A (FUGAX) invests the majority of its assets in public utility companies as well as firms deriving a large share of revenues from related operations. It purchases both domestic and foreign securities. The utilities mutual fund has a ten year annualized return of 3.19%.
Douglas Simmons is the fund manager has managed this utilities mutual fund since 2006.
To view the Zacks Rank and past performance of all utilities mutual funds, then click here.