Investors with a conservative mindset looking for stable current income can opt for investment in utility mutual funds. These funds 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 is often shielded from market volatility.
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 top-ranked utility mutual funds, namely Cohen & Steers Global Infrastructure Fund, Inc. Class A CSUAX, PGIM Jennison Utility Fund- Class A PRUAX 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 total return. CSUAX invests the majority of its total assets in U.S. and non-U.S. 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.
Cohen & Steers Global Infrastructure Fund, Inc. Class A has three-year annualized returns of 5.1%. As of March 2022, CSUAX held 59 issues, with 5.6% of its assets invested in Nextera Energy Inc.
PGIM Jennison Utility Fund- Class A seeks total return through capital appreciation and current income generation. PRUAX invests the majority of its investable assets in equity and equity-related and investment-grade debt securities of utility companies.
PGIM Jennison Utility Fund- Class A has three-year annualized returns of 7.9%. PRUAX has an expense ratio of 0.82% compared with the category average of 0.94%.
Fidelity Select Utilities Portfolio seeks capital appreciation by investing most of its net assets in common stocks of companies engaged in the utility business. FSUTX uses a fundamental approach like financial condition, industry position, as well as market and economic conditions to select investments.
Fidelity Select Utilities Portfolio has returned 8.3% in the past three years. Douglas Simmons has been the fund manager of FSUTX since October 2006.
To view the Zacks Rank and the past performance of all utility mutual funds, investors can click here to see the complete list of utility mutual funds.
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