The war between Israel and the Palestine-based militant group Hamas has affected the global supply chain. Also, the Russia-Ukraine war prompted several governments, including the United States, 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 expected to help in the near term.
Below, we share with you three top-ranked energy mutualfunds, viz., Fidelity Select Energy Portfolio FSENX, Invesco SteelPath MLP Select 40 MLPFX and Fidelity Natural Resources Fund 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.
Fidelity Select Energy Portfolio invests most of its assets in securities of companies principally engaged in the energy field, including the conventional areas of oil, gas, electricity and coal, and newer sources of energy such as nuclear, geothermal, oil shale and solar power. FSENX advisors use fundamental analysis of factors such as each issuer’s financial condition and industry position to select investments.
Fidelity Select Energy Portfolio has three-year annualized returns of 9.1%. As of February 2025, FSENX held 35 issues, with 24.8% of its assets invested in Exxon Mobil.
Invesco SteelPath MLP Select 40 invests most of its net assets in master limited partnerships (MLPs) and MLP-related securities. It primarily invests in issuers engaged in the transportation, storage, processing, refining, marketing, exploration, production and mining of minerals and natural resources.
Invesco SteelPath MLP Select 40 has three-year annualized returns of 25.4%. Stuart Cartner has been one of the fund managers of MLPFX since April 2010.
Fidelity Natural Resources Fund invests most of its net assets in securities of companies principally engaged in owning or developing natural resources and in precious metals. FNARX advisors use fundamental analysis of factors such as each issuer’s financial condition and industry position to select investments.
Fidelity Natural Resources Fund has three-year annualized returns of 14.3%. FRNRX has an expense ratio of 0.69%.