Utilities funds are an excellent choice for investors seeking a steady income flow. They are also used as defensive instruments, which protect investments during a market downturn. This is because the demand for essential services such as those provided by utilities remains unchanged even during difficult times. In recent years, many funds in this category have increased their exposure to emerging markets and unregulated companies. This has increased the risk involved but has also generated higher returns.
Below we will share with you the 5 best performing utilities mutual funds year to date.
|Mutual Fund||Zacks Rank||Total Return YTD|
|MFS Utilities A||#2 Buy||12.0%|
|ProFunds Utilities UltraSector||#1 Strong Buy||11.5%|
|Rydex Utilities||#1 Strong Buy||10.1%|
|Invesco Utilities||#1 Strong Buy||8.8%|
|Gabelli Utilities AAA||#3 Hold||8.8%|
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 1.40%.
ProFunds Utilities UltraSector (UTPIX) invests in stocks and derivatives that provide 150% of the daily return of the Dow Jones U.S. Utilities Index . The balance of the fund’s assets are utilised to purchase money market securities. The utilities mutual fund has a ten year annualized return of 3.19%.
Todd Johnson is the fund manager has managed this utilities mutual fund since 2008.
Rydex Utilities (RYAUX) seeks capital appreciation. The fund invests a large share of its assets in utilities companies whose securities are traded in the US. It focuses on purchasing equity securities and may also invest in derivatives. This utilities mutual fund returned 15.43% over the last one year period.
As of April 2011, this utilities mutual fund held 72 issues, with 3.23% of its total assets invested in The Southern Company.
Invesco Utilities Investor (FSTUX) invests the majority of its assets in stocks of companies in the utilities sector or related industries. Firms engaged in the production and distribution of gas and electricity as well as those providing telecom services constitutes its major investments. The utilities mutual fund has a five year annualized return of 4.5%.
The utilities mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.49% compared to a category average of 1.40%.
Gabelli Utilities AAA (GABUX) seeks income and capital growth. The fund 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%.
Mario J. Gabelli is the fund manager has managed this utilities mutual fund since 1999.
To view the Zacks Rank and past performance of all utilities mutual funds, then click here.