Zacks Investment Research Announces Top Five Best Performing Utility Mutual Funds

CHICAGO, Feb. 15, 2011 /PRNewswire/ -- Below we will share with you the five best performing utility funds year to date, Gabelli Utilities AAA (GABUX), Fidelity Select Utilities (FSUTX), Fidelity Advisor Utilities A (FUGAX), Vanguard Utilities Index Admiral Shares (VUIAX), and Franklin Utilities A (FKUTX).

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Even during a market downturn, the demand for essential services such as those provided by utilities, remains virtually unchanged. Utility mutual funds are therefore an excellent choice for investors seeking a steady income flow through consistent yields from dividends. This is also why they are primarily considered to be a relatively more conservative investment option. In recent times their forays into emerging markets have led to appreciably higher returns and they can offer superior returns at a relatively lower level of risk.

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 utility mutual fund has a five year annualized return of 6.64%.

Mario J. Gabelli is the utility mutual fund manager has managed this utilities mutual fund since 1999.

Fidelity Select Utilities (FSUTX) seeks capital growth. The mutual fund invests the majority of its assets 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 mutual fund.

The utilities mutual fund returned 10.94% in the last one year period and has a five year annualized return of 4.53%.

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 utility mutual fund has a ten year annualized return of 2.79%.

The utility mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.22% compared to a category average of 1.43%.

Vanguard Utilities Index Admiral Shares (VUIAX) seeks to track the performance of the MSCI U.S. Investable Market Utilities Index. This is index consists of companies in the utilities sector regardless of their market capitalization. The fund uses a passive management investment approach to track the index. This utility mutual fund returned 6.95% over the last one year period.

As of September 2010, this utility mutual fund held 89 issues, with 6.52% of its total assets invested in Southern Company.

Franklin Utilities A (FKUTX) invests the majority of its assets in securities of public utility companies. These include companies which produce or distribute electricity, natural gas and water. The mutual fund also purchases securities of communications services companies and service providers for public utilities. The fund returned 6.85% in the last one year period and has a ten year annualized return of 5.73%.

John Kohli is the mutual fund manager has managed this utilities mutual fund since 1998.

To view the Zacks Rank and past performance of all utilities mutual funds.

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Groups: #1 = Strong Buy #2 = Buy, #3 = Hold, #4 = Sell and #5 = strong sell.

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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PHD in mathematics from MIT Len knew he could find patterns in stock market data that would lead to superior investment results.  

Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin.

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Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

SOURCE Zacks Investment Research, Inc.