Investors with a conservative mindset looking for stable current income would do well to consider utility funds. They are 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 in difficult times.
In recent years, many funds in this category have increased their exposure to emerging markets and unregulated companies. Though this strategy has increased the risk involved, it has also generated higher returns.
Below, we share with you three Utility sector mutual funds, namely, Fidelity Select Utilities Portfolio FSUTX, Fidelity Telecom and Utilities Fund FIUIX, and Cohen & Steers Global Infrastructure Fund, Inc. CSUAX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
Fidelity Select Utilities Portfolio seeks capital appreciation by investing most of its net assets in securities of domestic and foreign companies engaged in the Utility business and earning the majority of their revenues from Utility operations. FSUTX advisors use a fundamental approach like financial condition, industry position, as well as market and economic conditions to select investments.
Fidelity Select Utilities Portfolio has a three-year annualized return of 4.7%. As of the end of December 2021, FSUTX held 30 issues with 14.61% of its assets invested in NextEra Energy Inc.
Fidelity Telecom and Utilities Fund invests most of its net assets in common stocks of domestic and international telecommunications services and utility companies. The FIUIX advisor chooses to invest in stocks based on fundamental approaches like the issuer’s financial condition, industry position, as well as market and economic conditions to select investments
Fidelity Telecom and Utilities Fund has three-year annualized returns of 1.8%. FIUIX has an expense ratio of 0.67% compared with the category average of 0.94%.
Cohen & Steers Global Infrastructure Fund, Inc. invests most of its net assets in common stocks and other equity securities issued by infrastructure companies, which consist of utilities, pipelines, toll roads, airports, railroads, marine ports, telecommunications companies and other infrastructure companies. CSUAX advisors also invest a small portion of their net assets in companies organized or located outside the United States, or doing a substantial amount of business outside the country.
Cohen & Steers Global Infrastructure Fund, Inc. has returned 0.6% in the past three years. Benjamin Morton has been the fund manager of CSUAX since April 2008.
To view the Zacks Rank and past performance of all Utility Sector Mutual Funds, investors can click here to see the complete list of funds.
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