3 Energy Mutual Funds for Higher Returns

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The recent war between Israel and the Palestine-based militant group Hamas has affected the global supply chain. Also, the prevailing war between Russia and Ukraine has prompted several governments, including the Biden administration, to impose sanctions on Russian oil and energy.

Crude prices have gone up on supply concerns from Russia, which is one of the world’s biggest producers of the commodity. Prices have risen further after the U.S. government imposed a ban on the import of oil and other energy products.

Geopolitical tensions are likely to keep markets volatile for some time, with the energy sector making the most of the opportunity. So, investing in funds with exposure to energy equities is likely to help in the near term.

Below, we share with you three top-ranked energy mutual funds, viz., Fidelity Select Energy FSENX, Goldman Sachs MLP Energy Infras GLPAX and T. Rowe Price New Era PRNEX.Each has 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 energy mutual funds.

Fidelity Select Energy seeks to achieve capital appreciation. FSENX invests in common stocks of companies whose primarily engaged in the energy industry, encompassing conventional areas such as oil, gas, electricity, and coal, as well as newer sources of energy like nuclear, geothermal, oil shale and solar power.

Fidelity Select Energy has three-year annualized returns of 31.4%. As of February 2024, FSENX held 41 issues, with 24.2% of its assets invested in Exxon Mobil Corp.

Goldman Sachs MLP Energy Infras fund invests in equity or fixed-income securities issued by energy infrastructure companies worldwide. GLPAX advisors also invest in non-energy infrastructure investments, which include both equity and fixed-income securities of companies, both in the United States and internationally.

Goldman Sachs MLP Energy Infras has three-year annualized returns of 23.3%. GLPAX has an expense ratio of 1.43%.

T. Rowe Price New Era fund seeks long-term capital appreciation by investing primarily in the common stocks of companies that own or develop natural resources and other basic commodities. PRNEX advisors also invest about two-thirds of its assets in the common stocks of natural resource companies where earnings and tangible assets can benefit from accelerating inflation.

T. Rowe Price New Era has three-year annualized returns of 8.8%. Shinwoo Kim has been one of the fund managers of PRNEX since 2021.

To view the Zacks Rank and the past performance of all energy mutual funds, investors can click here to see the complete list of energy mutual funds.

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