Energy was one of the key contributing sectors that led U.S. industrial production to a four-month high. In fact, the energy sector ended the last trading day of the previous week in the green, becoming the best-performing sector of the S&P 500.
A stable domestic economy is expected to boost overall crude demand in the coming days. So, mutual funds that have significant exposure to the energy sector could be solid investments. Mutual funds are better options while foraying into an industry as these reduce risks by holding a diversified portfolio.
Below, we share with you three top-ranked energy mutual funds, viz., PGIM Jennison MLP Fund PRPAX, T. Rowe Price New Era Fund PRNEX and Fidelity Select Portfolio Natural Resources Portfolio FNARX. 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.
PGIM Jennison MLP Fund seeks long-term growth of capital by investing in equity-related securities, primarily common stocks of companies. PRPAX advisors choose to invest in securities that are either undervalued or show growth potential.
PGIM Jennison MLP Fund has three-year annualized returns of 24.3%. As of February 2023, PRPAX held 23 issues, with 11.8% of its assets invested in Energy Transfer LP.
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 and in stocks of selected non-resource growth companies. PRNEX advisors also invest about two-thirds of the fund’s assets in the common stocks of natural resource companies where earnings and tangible assets can benefit from accelerating inflation.
T. Rowe Price New Era Fund has three-year annualized returns of 18.5%. Shinwoo Kim has been one of the fund managers of PRNEX since May 2021.
Fidelity Select Portfolio Natural Resources Portfolio seeks capital appreciation. FNARX advisors invest most of its assets in common stocks of companies principally engaged in owning or developing natural resources, or supplying goods and services to such companies, and in precious metals.
Fidelity Select Portfolio Natural Resources Portfolio has three-year annualized returns of 30.8%. FNARX has an expense ratio of 0.77% compared with the category average of 1.07%.
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