Today's Daily Screen turns its attention to utilities funds, where there's a bit of a payback theme playing out.
The upshot: A lot of utilities funds loaded up on high-octane wireless and telecommunications stocks last year to goose returns, but telecom stocks are cratering, bringing those higher-octane utilities funds down with them and allowing more diversified utilities funds to shine.
This year, utilities funds on average have been a shelter from the market's storm, gaining 5.2% compared with the
8.7% drop. We'll look at the leading utilities funds over the last three years and the stocks that have put them in the lead.
The concept of high-octane utilities funds might surprise some folks. Deregulation (translation: heightened competition and consolidation) has morphed the utilities sector into a growthy area, as opposed to its traditional tag as a refuge for "widows and orphans." Consequently, there are those utilities funds that spread their money around the sector and those that focus heavily on sizzling sectors like telecommunications -- the average utilities fund has only 43% of its money in utilities, according to
But there's a broad range of returns within the category. Last year's leader, no-load
Lindner Utility, which rose more than 60% in 1999, is down 7.6% so far this year, trailing its average peer by some 12 percentage points. If you're looking for a more traditional utilities fund, you might consider those we've turned up. We sifted the category for those that beat their average peer over the last one- and three-year periods. Here's the top 10, ranked by one-year return.
There's something here for everyone: two no-load index funds at the top of the list (
American Gas Index
is one of the better fund names out there, eh?), followed by a slew of broker-sold, actively managed funds. The list includes
, a broker-sold fund run by Maura Shaughnessy, who's considered one of the top utilities gurus. Check out her thoughts on the sector in this
10 Questions interview.
When we scan the list of top holdings among these top 10 funds, we find -- surprise, surprise -- utilities stocks. That said, there is a telecom stock,
, and some companies that are getting into the hot communications networking business like top cumulative holding