Top 5 Energy Mutual Funds - Best of Funds

As the demand for energy rises with every passing day, governments and companies alike are constantly evaluating new resources and technologies to combat the situation. The situation is even more acute for fast growing nations such as China and India which are seeing massive increases in the demand for energy. This is leading to a steady rise in the overall price level of energy and greater opportunities in the energy management domain. Mutual funds investing in energy tap into this global phenomenon while controlling risk through well diversified portfolios.

Below we will share with you 5 top rated energy mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all energy funds, then click here.

BlackRock Energy & Resources (SSGRX) invests a large share of its assets in energy and natural resources firms worldwide. It also invests in companies in related sectors as well as in utilities. This energy mutual fund returned 37.96% over the last one year and has a ten year annualized return of 19.95%.

The energy mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.35% compared to a category average of 1.84%.

Fidelity Select Energy (FSENX) seeks capital growth. It invests the majority of its assets in equity securities of companies whose principal operations are related to the energy sector. The fund invests in both conventional and alternative energy companies. The energy mutual fund returned 39.87% over the last one year period.

The fund manager is John Dowd and he has managed this energy fund since 2006.

Vanguard Energy Index (VENAX) invests in approximately all of the equity securities which make up its target index, the MSCI US Investable Market Energy 25/50 Index. This index is made of large, medium and small domestic companies from the energy sector. The energy mutual fund has a three year annualized return of 4.57%.

The energy mutual fund has an expense ratio of 0.24% compared to a category average of 1.84%.

Rydex Energy (RYEIX) seeks to provide investors long-term capital growth. It invests heavily in equity securities and derivatives of energy companies which are traded in the U.S. This includes companies which provide products and services to the energy sector. This energy mutual fund returned 37.43% over the last one year period.

As of March 2011, this energy mutual fund held 93 issues, with 6.05% of its total assets invested in ExxonMobil Corporation.

Ivy Global Natural Resources A (IGNAX) invests the majority of its assets in equity securities of companies, whose primary operations are related to natural resources, including suppliers and service providers. The fund seeks international diversification by investing in foreign firms or in domestic companies with large foreign operations. The energy mutual fund has a five year annualized return of 6.64%.

The fund manager is Fred Sturm and he has managed this energy mutual fund since 1997.

To view the Zacks Rank and past performance of all energy mutual funds, then click here.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds/mutualfund/