Utilities funds have been traditionally viewed as defensive investments which protect investments during difficult market conditions. Since the demand for these services remains constant over market cycles, such funds are ideal for those seeking a steady flow of current income through consistent dividend yields. In recent years many funds in this category have increased their exposure to emerging markets and have added unregulated utilities companies in their portfolio. This has led to higher returns and an increase in volatility. However, investors who are relatively risk averse can continue to rely on these funds for regular dividends over time.
Below we will share with you the 5 best performing utilities mutual funds year to date.
|Mutual Fund||Zacks Rank||Total Return YTD|
|ProFunds Utilites UltraSector||#4 Sell||13.8%|
|MFS Utilities A||#3 Hold||12.3%|
|Rydex Utilities||#5 Strong Sell||11.2%|
|Franklin Utilites A||#3 Hold||10.2%|
|Invesco Utilities Investor||#3 Hold||10.0%|
Todd Johnson is the fund manager has managed this utilities mutual fund since 2008.
MFS Utilities A (MMUFX) seeks total return. The fund invests heavily in 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 ten year annualized return of 8.06%.
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 1.39%.
Rydex Utilities (RYAUX) 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 24.92% over the last one year period.
As of May 2011, this utilities mutual fund held 72 issues, with 3.33% of its total assets invested in The Southern Company.
Franklin Utilities A (FKUTX) seeks current income and capital growth. The fund concentrates on purchasing equity in public utilities companies. More than 25% of its assets are invested in companies that provide electricity, gas, water and communication services. The utilities mutual fund has a five year annualized return of 6.84%.
John Kohli is the fund manager has managed this utilities mutual fund since 1998.
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. This utilities mutual fund returned 25.48% over the last one year period.
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 1.39%.
To view the Zacks Rank and past performance of all utilities 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.