3 Top-Ranked Energy Mutual Funds Poised for Strong Gains

The recent war between Israel and the Palestine-based militant group Hamas has affected the global supply chain. Also, the prevailing war between Russia and Ukraine has 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 capitalizing on 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.,Vanguard Energy Fund VGENX, Invesco SteelPath MLP Select 40 (MLPFX) and T. Rowe Price New Era PRNEX. 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.

Vanguard Energy Fund invests most of its assets in the common stocks of companies engaged in the energy industry. VGENX invests in companies that engage in the exploration, production and transmission of energy or energy fuels, the making and servicing of component products for such activities.

Vanguard Energy Fund has three-year annualized returns of 8.9%. As of January 2025, VGENX held 42 issues, with 9.3% of its assets invested in Shell plc.

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 business of 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 18.7%. Stuart Cartner has been one of the fund managers of MLPFX since April 2010.

T. Rowe Price New Era invests the majority of its assets in the common stocks of natural resource companies. PRNEX advisors also invest in other growth companies that they believe have strong potential for earnings growth but do not own or develop natural resources.

T. Rowe Price New Era has three-year annualized returns of 1.6%. PRNEX has an expense ratio of 0.77% compared to the category average of 1.04%.

To view the Zacks Rank and the past performance of all energy mutualfunds, investors can click here to see the complete list of energy mutual funds.

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This article originally published on Zacks Investment Research (zacks.com).

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