Big Movers Among Utility Funds

Utility funds had an excellent week. The average utility sector fund we track climbed 1.90% for the five trading days ending Thursday, April 17. Favorable weather and new North American natural gas finds may have been contributing factors.

More likely, the gains are traced to the deregulated, independent power-generation companies like NRG Energy(NRG Quote), Reliant Energy(RRI Quote) and Mirant(MIR Quote), which charge for wholesale electricity at what the market will bear. These prices are set from the more-expensive natural gas-generated electricity. They then produce as much cheaper coal- or nuclear-based electricity as they can in order to profit from the cost difference.

The best-performing utility fund this week is the Ultra Utilities ProShares(UPW Quote), gaining 6.96%. The fund is 200% leveraged to the Dow Jones U.S. Utilities Index. The second-place ProFunds Utilities UltraSector ProFund(UTPSX Quote) tracks the same index, but at 150% leverage. The four largest holdings are Exelon(EXC Quote), Southern Union(SUG Quote), Dominion Resources(D Quote) and FPL Group(FPL Quote).

The Fidelity Select Utilities Growth Fund(FSUTX Quote) ranks third on our best-performer list. This fund has rebounded from last month's lows but is still down over the last 12 months. One of the fund's holdings, Public Service Enterprise Group(PEG Quote), surged on news of approval from the Federal Energy Regulatory Commission for higher incentive profits for building a $1 billion power line from Pennsylvania to New Jersey.

Best Performing Utility Funds for the Week Ending Thursday April 17
Fund	Ticker	Rating	Fund Type	1 Week Total Return
Ultra Utilities ProShares	UPW	E-	ETF	6.96%
ProFunds Utilities UltraSector Profund	UTPSX	C+	Open-End	4.88%
Fidelity Select Utilities Growth Portfolio	FSUTX	A+	Open-End	3.93%
Fidelity Advisor Utilities Fund	FAUFX	A+	Open-End	3.68%
PowerShares Dynamic Utilities Portfolio	PUI	D	ETF	3.54%
PowerShares FTSE RAFI Utilities Sector Portfolio	PRFU	D+	ETF	3.46%
Utilities Select Sector SPDR Fund	XLU	B	ETF	3.39%
Vanguard Utilities ETF	VPU	B+	ETF	3.37%
Utilities HOLDRs Trust	UTH	B+	ETF	3.30%
Vanguard Utilities Index Fund	VUIAX	A	Open-End	3.27%
Source: Bloomberg & TheStreet.com Ratings

This week, the worst-performing utility fund is the UltraShort Utilities ProShares(SDP Quote), which sank 6.62% for the five trading days. This fund tracks the Dow Jones U.S. Utilities Index with double negative leverage. The index members gaining the most this week include: NRG Energy Inc, up 7.03%; Aquila(ILA Quote), up 6.38%; Public Service Enterprise Group Inc, up 6.18%; Mirant(MIR Quote), up 5.98%; and Equitable Resources(EQT Quote), up 5.88%.

Making its second consecutive appearance as the second-worst-performing utility is the Evergreen Utilities and High Income Fund(ERH Quote), slipping 1.35%. Eight of this fund's 10 underperforming positions are in the telecommunications sector.

Returns of negative 5.29% from BT Group(BT Quote), negative 3.51% from Rogers Communications(RCI Quote), negative 1.85% from Telus(TU Quote) and negative 1.65% from AT&T(T Quote) offset the positive water and electric utility stock returns.

BT was likely hurt by expectations that certain mobile-phone fees are expected to decline.

Plus, AT&T is cutting 4,650 workers to trim overlapping costs after several large acquisitions. Employees servicing the home phone-line business are to bear the brunt of the job losses after 1.6 million AT&T residential-line customers disconnected in favor of cable and wireless mobile phones.

Worst Performing Utility Funds for the Week Ending Thursday April 17
Fund	Ticker	Rating	Fund Type	1 Week Total Return
UltraShort Utilities ProShares	SDP	B-	ETF	-6.62%
Evergreen Utilities and High Income Fund	ERH	B-	Closed-End	-1.35%
DTF Tax-Free Income Inc	DTF	C	Closed-End	-0.08%
Duff & Phelps Utility and Corporate Bond Trust	DUC	C	Closed-End	-0.05%
Gabelli Utility Trust	GUT	C+	Closed-End	0.01%
WisdomTree International Utilities Sector Fund	DBU	B	ETF	0.09%
ICON Telecommunications & Utilities Fund	ICTUX	B	Open-End	0.26%
Nationwide Global Utilities Fund	GGUAX	B+	Open-End	0.31%
RiverSource Dividend Opportunity Fund	INUTX	C	Open-End	0.36%
Reaves Utility Income Fund	UTG	B-	Closed-End	0.44%
Source: Bloomberg & TheStreet.com Ratings

In the near future, in a thought just in time for Earth Day, electric utilities will have to plan for increased nighttime kilowatt-hour usage as residents charge up their plug-in electric car batteries and top off their home-storage batteries.

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