IntroductionOne of the income producing mutual funds is utilities sector mutual funds. These utilities funds consist of utilities companies. These companies engage in the production and service of electric power, water, natural gas, and other utility services. These funds have higher dividend yield than typical U.S. domestic stock mutual funds.
The utilities funds are typically less sensitive to economic cycles. They are also less volatile than other stock funds. Please check the fund prospectus for additional information about the fund objective.
Top Utilities Sector Mutual Funds
These top utilities sector funds are chosen based on its long term performance. You may find other fund information such as fund manager, dividend yield, top holdings, fund objective, etc.
The 10 Best Utilities Sector Stock Mutual Funds of 2012 are:
- FBR Gas Utility Index Investor (GASFX)
- MFS Utilities A (MMUFX)
- Franklin Utilities A (FKUTX)
- Gabelli Utilities A (GAUAX)
- Flex Funds Utilities and Infrastructure (FLRUX)
- Wells Fargo Advantage Utility & Telecom A (EVUAX)
- Rydex Utilities Inv (RYUIX)
- Reaves Select Research Inv (RSRAX)
- American Century Utilities Inv (BULIX)
- ICON Utilities A (ICTUX)
The investment objective of FBR Gas Utility Index fund is to seek income and capital appreciation. This sector equity fund tries to replicate the performance of the American Gas Association Stock Index. It invests in the common stock of companies that have natural gas distribution and transmission operations. Winsor Aylesworth has managed this top performer Utilities fund since January 2001.
The CUSIP of this fund is 30246J604. The 12-month dividend yield is 2.48%. The fund has lower annual expense ratio (0.71%) compared to the average in the Utilities category (1.36%). Investors of this fund require a minimum initial purchase of $2,000 to open a brokerage account and $1,000 for retirement account. There is no sales load fee for investing in this fund.It has a Year-To-Date return of 0.49%. The 5-year average return is 6.58%. The best 1-year total return was recorded in 2000 with 55.86%. As of December 2011, the top holdings are Trans Canada Corp (4.9%), Williams Companies Inc (4.9%), El Paso Corp (4.9%), Enbridge Inc (4.9%), National Grid PLC (4.9%) and ONEOX Inc (4.9%). The top contributors are El Paso Group (52.1%), William Companies (36.7%) and ONEOK Inc (32.2%).
2. MFS Utilities A (MMUFX)
The MFS Utilities fund uses its assets to purchase stocks of companies in the utilities industry. This MFS fund has total net assets of $4.45 billion. It has 1.04% expense ratio. Its 12b1 fee is 0.25% and the maximum sales charge is 5.75%. The current fund manager is Maura A. Shaughnessy. The annual holdings turnover as of April 13, 2012 is 51%.The largest equities sectors/ categories are Utilities & Communications (80.10%), Leisure (11.84%) and Energy (4.5%). It has 109 total holdings as per March 2012. The top 5 stocks are El Paso Corp, Comcast Corp, CMS Energy Corp, Virgin Media Inc and Public Service Enterprise Group Inc.
3. Franklin Utilities A (FKUTX)
The Franklin Utilities fund objective is to seek capital appreciation and current income through investment in stocks of public utilities companies. These are companies that provide electricity, natural gas, water, and communications services to the public. This utility sector equity fund has been in the market for 60 years. The inception date of this fund was in September 1948.
Morningstar analysts rated this fund with Gold and 4-stars rating. The total net assets are $3.93 billion. It also has annual expense ratio of 0.76%. From the 12-month dividend yield of 3.37%, it has just distributed $0.11 to its investor in March 1, 2012. The fund is currently managed by John Kohli.
This best mutual fund has its best 1-year total return in 2000 with 41.61%. Based on the load adjusted return, the fund has returned 10.56% over the past 1-year and 7.68% over the past 10-year. Vanguard, JP Morgan, Schwab Retail, Merrill Lynch, Scottrade Load are among the brokerages that provide the sale of this fund.
4. Gabelli Utilities A (Ticker: GAUAX)
The Gabelli Utilities fund invest majority of assets in securities of domestic or foreign companies which provide service in utility industry. Mario J. Gabelli is the current lead manager of this GAUAX fund. The other classes of this fund are Class AAA (GABUX), Class C (GAUCX) and Class I (GAUIX).Investors will need a minimum initial fund of $1,000 to invest in a brokerage account. For retirement (IRA) account, investors need $250 initial investment. There is no minimum subsequent investment needed. The management fee is 0.25% and the maximum sales load is 5.75%.
The top holdings as of December 2011 are National Fuel Gas Co (4.2%), NextEra Energy Inc (2.4%), El Paso Corp (2.3%), Southern Union Co (2.0%) and Southwest Gas Corp (2.0%). It has total of 247 holdings. Since its inception, this fund has 8 years of positive return and 1 year of negative return.
5. Flex Funds Utilities and Infrastructure (FLRUX)
The investment aim of Flex Funds Utilities and Infrastructure fund is to achieve total returns, including capital appreciation and income. This mutual fund uses its assets to buy equity securities of domestic or foreign utility companies, their suppliers and subcontractors. It may invest in common and preferred stocks. Its dividend yield is 1.44%.
This no load utility sector equity fund has annual expense ratio of 1.90%. This is a little higher than the average in the Utilities category (1.36%). The annual holdings turnover as of April 19, 2012 is 43%. It has total net assets of $33.11 million. Morningstar rated this fund with 3-stars rating.The top 5 stocks as of March 2012 are NiSource Inc (8.46%), Questar Corp (4.67%), Qualcomm Inc (4.50%), Enterprise Products Partners LP (4.03%), AT&T Inc (3.87%) and American Water Works Inc (3.83%). The top 5 sectors are energy (34.98%), utilities (27.39%), communication services (16.21%), industrials (10.91%), and technology (6.59%).
6. Wells Fargo Advantage Utility & Telecommunications A (EVUAX)
This Wells Fargo Advantage Utility & Telecommunications fund invests most of assets in utility and telecommunications companies. It may invest in common, preferred, convertible preferred stocks, and investment grade bonds.
Morningstar analysts rates this utilities sector stock fund with 3-star rating. This utility sector equity fund has a Year-To-Date return of 2.64%. The annual holdings turnover is quite low (8.00%) compared to the average in the Utilities category that reaches 97.70%. This best utility mutual fund is currently managed by Timothy O’Brien.
The top sectors as of March 2012 are Utilities (69.33%) and Energy (14.02%). The top holdings are El Paso Corporation (6.04%), ITC Holdings Corporation (5.28%), Northeast Utilities (4.41%), Wisconsin Energy Corporation (4.22%), American Electric Power Company (4.07%) and Nextera Energy Incorporated (4.03%).
7. Rydex Utilities Inv (RYUIX)
Rydex Utilities is a no load mutual fund. It has $43.7 million of total net assets. The dividend yield is 1.34% per year. It also has a portfolio turnover rate of 800%. This best utility sector mutual fund opens to new investors. The 10 year annualized return is 5.23%.
8. Reaves Select Research Inv (RSRAX)
The Reaves Select Research fund invests in equities of the utilities and/or energy industries companies. The investment style of this fund is large value. This domestic stock fund also has a yield of 1.63%. The front end sales load is 4.75%. The top 3 stocks are American Water Works Co In, Pinnacle West Capital, and Southern Co.
9. American Century Utilities Inv (BULIX)
This American Century Utilities fund has a dividend yield of 3.42%. Its total net assets are $292 million. This no load fund has a portfolio turnover rate of 17%. The minimum initial investment requirement is $2,500. The fund managers are William Martin and Lynette Pang.
The 10 year annualized return is 7.31%. As of April 2012, the top 4 stocks in its portfolio are AT&T Inc, Verizon Communications Inc, Public Service Enterprise Group Inc, and American Electric Power Co Inc.
10. ICON Utilities A (ICTUX)
This ICON Utilities fund uses its assets to buy equity securities of companies in the Utilities sectors. The fund manager is Robert Straus since 2011.
This utilities sector equity mutual fund has returned 1.23% over the past 5 year, and 6.44% over the past 10 year. As of April 2012, the top 3 stocks are Southern Co, Duke Energy Corporation, and American Electric Power Co Inc.
Disclosure: No Position
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