Utility Funds
  • Utility funds are equity funds which invest heavily in utility company stocks and other securities
  • The best no load funds offer at least a little portfolio diversity, even if the portfolio is heavy in the utility sector
  • Utility mutual funds may be right for many investors

Utility funds can be a good investment for many investors. These funds make investments from the equity portfolio of at least sixty five percent in utility stock shares. Utility mutual funds and utility stock funds invest in public utility company securities, and these funds tend to hold portfolios which may include a number of different utility securities and types. The best no load funds will be those that are diverse, and do not involve any load or marketing fees at all. Utility funds are not always diverse in their portfolio holdings, because most of the investment pool is put into utility stocks and securities. If the utility sector starts to perform poorly this can lead to losses, because the portfolio is not highly diversified, and these utility mutual funds may not be ideal for investment capital that can not be put at risk. This does not mean that investing in utility stock funds is a bad choice for many investors, but just like any investment option it is not necessarily ideal for all investors. Make sure to do all of the necessary research and evaluations to ensure that the risks associated with the chosen utility funds are within the acceptable levels of risk.

No load utility funds perform just as well as load funds of this same type, and there are no load fees to reduce the investment capital and start the value at less than the initial investment amount. Front load fees deduct the fee, usually a percentage between five and eight percent of the amount being invested. If you do not need advice, why pay this high fee? There are few investors who are not capable of choosing the right investments, especially with all of the free available resources that can be accessed on the Internet. This means that paying a load fee is usually an additional expense that offers no benefits. The best no load funds include mutual funds in a variety of sectors, including utilities. These utility mutual funds offer comparable performance, and some experts actually believe that no load funds outperform load funds due to the fees being much smaller.

Utility mutual funds are considered equity funds, because these mutual funds have investments of at least sixty five percent of the portfolio invested in equity securities that pay dividends. These funds are popular for investors who want to add diversification to their portfolio, but many experts warn that the utility mutual funds may tend to be heavy in the energy sector, which can be volatile at times. Care should be taken to compare many different utility funds before choosing the ones to invest in. Compare the fund holdings, and look for mutual funds which are at least diversified in the utility sector, instead of having a large percentage of the portfolio in one single utility. Looking for utility funds that have a positive impact on the environment, like those which invest in utility companies that do not pollute or release large amounts of greenhouse gases.

The best no load funds involving utility funds are those which fit within the investment strategy and acceptable risks. Look for funds that hold high quality stocks and other equity securities. These funds are not for everyone, and they do have risks involved, but for some investors they can be exactly what is needed in their portfolio. No load funds means making your own investment decisions, but that may actually be a benefit. It allows you to get the best possible investment information, and to base decisions on your own best investment interests instead of the best financial interests of the broker.