The global energy market is an integral part of the global economy. Here, we profile three energy-focused mutual funds that not charge a sales load and also pay dividends.
They are the Vanguard Energy Fund Investor Shares (VGENX), the Fidelity Select Natural Gas Fund (FSNGX), and the Guinness Atkinson Global Energy Fund (GAGEX).
Key Takeaways
- The global energy market one of the most integral parts of the global economy and many mutual funds cover the industry—though only somepay dividends.
- Three energy-focused mutual funds that pay dividends are the Vanguard Energy Fund Investor Shares (VGENX), the Fidelity Select Natural Gas Fund (FSNGX), and the Guinness Atkinson Global Energy Fund (GAGEX).
- The three funds are neither the only funds that cover the energy sector, nor are they the only energy-focused funds that pay dividends, but they are some of the largest that meet the criteria.
1. Vanguard Energy Fund Investor Shares
The Vanguard Energy Fund Investor Shares (VGENX)is an actively managed fund that offers exposure to companies engaged in the energy business. This includes companies involved with the production and transmission of energy, manufacturing component products, energy research, and investing in energy conservation and pollution control. Although the fund focuses on energy companies in the U.S. and abroad, up to 100% of its assets may be held in foreign holdings.
As of early June 2021, the Vanguard Energy Fund held 44 positions representing $4.3 billion in assets. The utilities sector accounted for 44% of holdings, followed by integrated oil and gas companies at 28.2%. Foreign holdings represented nearly 50% of the fund's assets.
This mutual fund has an expense ratio of 0.32%. The minimum investment is $3,000. As of early June 2021, the 30-day SEC yield for the Vanguard Energy Fund was 3.14%.
2. Fidelity Select Natural Gas Portfolio
The Fidelity Select Natural Gas Portfolio (FSNGX) focuses on capital appreciation and invests in companies engaged in the exploration, production, transmission, and distribution of natural gas. This also includes companies that provide services and equipment to natural gas producers, refineries, cogeneration facilities, converters, and distributors. Normally, at least 80% of fund assets will be invested in the common stock of these types of businesses.
As of late March 2021, the Fidelity Select Natural Gas Portfolio held 50 positions representing just $122 million in assets. Storage & Transportation and Exploration & Production each represented about 30% of the fund's assets. Equipment & Services took up 16%. Its holdings were primarily concentrated in the U.S. at 72%, followed by Canada at nearly 23%.
This mutual fund has an expense ratio of 0.93%. There are no investment minimums. Dividends are paid in April and December.
3. Guinness Atkinson Global Energy Fund
The Guinness Atkinson Global Energy Fund (GAGEX) seeks long-term capital appreciation by investing in companies engaged in the exploration, production, and distribution of oil, gas, and other energy sources. Fund managers look to macro data such as economic indicators and commodity prices to determine asset allocation. It then screens for companies based on valuation, quality, sentiment, and momentum. The fund has the MSCI World Energy Index as its benchmark.
As of late February 2021, the Guinness Atkinson Global Energy Fund held 35 positions representing $10.4 million in assets. The Oil & Gas sector accounted for 95.5% of the fund's holdings. The U.S. and Canada accounted for 33.7% and 15.3% of assets, respectively.
This fund has a net expense ratio of 1.45%. The minimum investment is $1,000 for Individual Retirement Accounts and $5,000 for other accounts. Subsequent investments must be at least $250. The fund pays its dividends in late December.
