The global energy market is responsible for at least 10% of the world's annual gross domestic product (GDP). Learn more about three of the highest dividend-paying, energy-focused mutual funds that do not have any sales load associated with them: the Vanguard Energy Fund Investor Shares (VGENX), the Fidelity Select Natural Gas Fund (FSNGX) and the Guinness Atkinson Global Energy Fund (GAGEX). All information here was accurate as of Oct. 14, 2018.
Vanguard Energy Fund Investor Shares
The Vanguard Energy Fund Investor Shares is an actively managed mutual fund that offers investors low-cost exposure to U.S. and non-U.S. companies engaged in various aspects of the energy business. While many energy funds invest in a broad range of companies that explore, produce and distribute many different types of energy, the Vanguard Energy Fund focuses purely on coal, natural gas and oil. The fund may also invest up to 100% of its assets in foreign holdings.
The Vanguard Energy Fund invests in 125 different holdings and a median market cap of $52.30 billion. The fund has 32.4% of its assets in foreign securities. The most heavily invested sector in the fund is integrated oil and gas at 40.70%, and the second-highest weighted sector in the portfolio is oil and gas exploration and production at 33.80%. The mutual fund has an expense ratio of 0.38%, which is 72% lower than the average expense ratio of funds with similar holdings. The minimum investment for this fund is $3,000.
Fidelity Select Natural Gas Portfolio
The Fidelity Select Natural Gas Portfolio is an equity energy mutual fund that seeks capital appreciation by investing primarily in companies involved in the following areas of the natural gas industry: distribution, exploration, production and transmission. The fund also invests in companies that provide services and equipment to natural gas producers, refineries, cogeneration facilities, converters and distributors. Under normal circumstances, the fund invests at least 80% of its assets in the common stock of these types of companies.
The fund's asset allocation is as follows: oil and gas exploration and production at 46.11%, oil and gas equipment services at 17.78%, oil and gas storage and transportation at 16.25%, gas utilities at 6.58%, integrated oil and gas at 5.81%, oil and gas drilling at 4.62%, and multi-utilities at 2.70%. The portfolio has a 83.55% allocation to companies in the United States, while the remainder is in international equities. The fund has $268.78 million in net assets and an expense ratio of 0.89%.
Guinness Atkinson Global Energy Fund
The Guinness Atkinson Global Energy Fund seeks long-term capital appreciation by investing in listed equities of companies engaged in the exploration, production and distribution of oil, gas and other energy sources. A thorough analysis of economic indicators, the broad market and commodity prices determines the fund's sector allocation, while a screening tool prioritizes individual company selection by filtering on valuation, quality, sentiment and momentum.
The Guinness Atkinson Global Energy Fund has 47.39% of its assets invested in the United States, while the rest of the portfolio is allocated to companies in China, Canada, the United Kingdom, Austria, Norway, France, Russia and Italy. Versus the MSCI World Energy Index, the fund has an upside capture of 114.77%. The fund's expense ratio is 1.45%, and the minimum investment varies depending on the type of account in which it is held.