Top 3 Utility Mutual Funds to Invest in Amid Market Downturn

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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, Cohen & Steers Global Infrastructure Fund, Inc. Class A CSUAX, Franklin Utilities Fund Class A1 FKUTX, and Fidelity Select Utilities Portfolio FSUTX. 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.

Cohen & Steers Global Infrastructure Fund, Inc. Class A seeks capital appreciation by investing most of its net assets in equity and common stocks of domestic and foreign companies that are involved in utilities, pipelines, toll roads, airports, railroads, marine ports, telecommunications, and other infrastructure businesses. CSUAX advisors can also invest a small portion of their investments in companies or have substantial business outside the United States.

Cohen & Steers Global Infrastructure Fund, Inc. Class A has a three-year annualized return of 7.4%. As of the end of December 2021, CSUAX held 59 issues with 6.36% of its assets invested in NextEra Energy Inc.

Franklin Utilities Fund Class A1 seeks capital growth along with current income by investing most of its net assets in public utility companies that provide electricity, natural gas, water, and communications services. FKUTX invests primarily in equity securities.

Franklin Utilities Fund Class A1 has three-year annualized returns of 9.6%. FKUTX has an expense ratio of 0.72% compared with the category average of 0.94%.

Fidelity Select Utilities Portfolio seeks capital appreciation by investing most of its net assets in securities of domestic and foreign companies that are engaged in the Utility business and earn the majority of its 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 returned 9.7% in the past three years. Douglas Simmons has been the fund manager of FSUTX since October 2006.

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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