The top 4 oil mutual funds

Businesses operating within the oil and gas industry are plentiful, with activities including drilling, extraction, oilfield services, oil refining, and transportation. Oil is a vital energy product in a large number of industries around the world, and although alternatives to oil are beginning to make their way into the energy market, the demand for oil remains high. The oil industry offers investors the opportunity to participate in a growth-oriented equity market that boasts exponential long-term profit margins.

Despite individual and commercial demand for petroleum products on a global scale, the petroleum industry carries great risk for investors. Investing in the oil industry can be done by purchasing industry-focused mutual fund stocks. While there are a number of mutual funds that have substantial holdings in the oil sector, most funds fall into natural resources or energy categories.

Key takeaways

  • The energy sector may attract investors looking to diversify their portfolio, speculate on demand for oil and fossil fuels, or see it as a hedge against inflation.
  • Oil and energy mutual funds are tasked with investing exclusively in this sector by investing the majority of their portfolios in energy-related companies.
  • There are several energy funds out there, and here let’s just look at some of them. There are also energy ETFs that may be a more affordable option for individual investors.

Vanguard Energy Fund (VGENX) Investor Shares

The Vanguard Energy Fund was established in 1984 with the objective of providing long-term capital appreciation by investing a minimum of 80% of the fund’s assets in the common shares of companies primarily engaged in activities related to the energy industry. . Integrated Oil & Gas, combined with Oil & Gas Exploration & Production, represents 43.4% of the fund’s holdings. As of June 30, 2021, the Vanguard Energy Fund manages $ 4.8 billion in investor assets.

VGENX’s 10-year annualized return is -2.69% as of June 30, 2021. Fund managers can maintain a relatively low expense ratio for the fund of 0.37%. Investors do not pay an upfront or deferred sales charge for investing in the fund, but a minimum initial investment of $ 3,000 is required and annual turnover is 23.8% of assets.

Fidelity Select Energy Portfolio (FSENX)

The Fidelity Select Energy portfolio is supported and managed by Fidelity Investments and was first made available to investors in 1981. Fund managers focus on long-term capital appreciation. FSENX invests a minimum of 80% of the fund’s assets in securities of companies engaged in activities in the energy field, including oil, gas, electricity, coal and new energy sources. This undiversified fund uses fundamental analysis to determine how investible each company’s security is, based on financial condition and position in the industry. As of June 30, 2021, FSENX manages $ 1.3 billion in assets.

FSENX has generated a 10-year annualized return of -2.08%, with an expense ratio of 0.85%. Shares in the mutual fund are available as sales charges at no charge or deferred, and with no minimum investment. The fund has a turnover rate of 31% of assets / year. The main holdings within FSENX include Chevron, Exxon Mobil, ConocoPhillips, Royal Dutch and other related companies.

BlackRock Natural Resources Trust Fund (MDGRX)

The BlackRock Natural Resources Trust Fund was established in 1994. It seeks to provide investors with long-term capital growth by investing the majority of its $ 165.1 million in assets (as of July 19, 2021) in securities of companies with substantial assets in natural resources. Fund managers tend to include companies involved in energy, chemicals, oil, gas, paper, mining, steel, and agricultural products.

As of June 30, 2021, MDGRX has generated a 10-year annualized return of 0.82%, with an expense ratio of 1.26%. Investors must pay a 5.25% upfront selling charge with any new share purchases, although a deferred selling charge is not assessed at the time of redemption. A minimum investment of $ 1,000 is also required for qualified and non-qualified accounts. The main holdings include Chevron Corp, TotalEnergies, Vale SA, Royal Dutch and others.

Integrity Mid-North American Resources Fund (ICPAX)

The Integrity Mid-North American Resources Fund is offered to investors through the Integrity family of mutual funds and has a start date of 1999. Fund managers seek to provide investors with long-term capital appreciation by investing the Most of the fund’s assets are shares of national and foreign issuers that participate or benefit from the development of resources located in the Williston Basin area.

In addition, the fund may invest in equity securities of companies that benefit from or participate in Mid-North American resources. A portion of the equity securities included in the fund may be for companies that have not yet passed the development stage or those without significant income. Assets within the fund amount to $ 119.6 million as of July 2021.

ICPAX has generated a 10-year annualized return of -2.23% with an expense ratio of 1.50%. Investors pay a 5% upfront sales charge on all new investments, and it takes a minimum of $ 1,000 to purchase shares. It has the highest annual turnover rate of the three, with 79.67% of assets. The main holdings within ICPAX include Cabot Oil and Gas, Phillips 66, Pioneer Natural Resources and Archrock Inc.

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Mark Holland

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