Top 5 Energy Mutual Funds (June 2011)

By Jun 2, 2011, 12:44 PM Author's Blog  

Energy mutual funds offer an attractive opportunity to investors with a long term horizon since they represent a stable industry with a bright future. The demand for energy continues to rise steadily and this is particularly true of nations growing at a rapid pace. Along with this trend, the pressure on natural resources which are harnessed to provide energy and related services has also increased considerably. 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.

Vanguard Energy (VGENX) utilizes the majority of its assets 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. The energy mutual fund returned 29.64% over the last one year period.

The fund manager is Karl E. Bandtel and he has managed this energy fund since 2002.

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. This energy mutual has a ten year annualized return of 10.43%.

The energy mutual fund has a minimum initial investment of $500 and an expense ratio of 1.39% compared to a category average of 1.52%.

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. The energy mutual fund returned 37.31% over the last one year period.

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

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 has a five year annualized return of 6.01%.

As of March 2011, this energy mutual fund held 71 issues, with 14.43% of its total assets invested in ExxonMobil Corporation.

Ivy Global Natural Resources A (IGNAX) invests the majority of its assets 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. The energy mutual fund returned 34.13% over the last one year period.

The energy mutual fund has a minimum initial investment of $500 and an expense ratio of 1.45% compared to a category average of 1.52%.

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

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 at http://www.zacks.com/funds/mutualfund.

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