Even as all eyes remain trained on the BP oil spill situation, new energy sources, both conventional and modern have become the top priority of nations and corporations alike. Emerging economies, in particular, face a rapid demand for energy resources. These factors have led to a steady increase in the overall price level of energy products and services. Alternative energy companies and firms providing services to this sector are also gaining importance. Energy funds harness the inherent strengths of this sector relying on focused research and wide portfolio diversification.

Below we will share with you the 5 best performing energy funds year to date. To view the Zacks Rank and past performance of all energy funds, then click here.

Vanguard Energy (VGENX) seeks capital appreciation over the long term. The majority of its assets are used to purchase common stocks of companies whose primary activities are energy related. The fund may invest without limit in foreign stocks. This energy fund has a ten year annualized return of 12.47%.

The fund manager is Karl E. Bandtel and he has managed this energy fund since 2002.

Fidelity Select Energy (FSENX) invests the majority of its assets in equity securities of companies whose principal operations are related to the energy sector. The fund invests in both conventional energy companies and those focusing on newer sources such as nuclear, geothermal and solar power. It may purchase foreign securities. The fund returned 7.71% over the last one year period.

The energy fund has a minimum initial investment of $2,500 and an expense ratio of 0.90% compared to a category average of 1.68%.

ICON Energy (ICENX) seeks capital growth over the long term. The fund invests heavily in equity securities of energy companies that are traded in the U.S. Common and preferred stocks of companies of all sizes constitute the fund’s major investments. The fund is non-diversified and has a five year annualized return of 7.04%.

As of Mary 2010, this energy fund held 49 issues, with 15.14% of its total assets invested in Chevron Corporation.

Rydex Energy Services (RYVIX) invests at least 80% of its assets in equity securities of domestic energy services companies. The fund may also utilize derivatives to fulfill its investment objectives. It is non-diversified and seeks long-term capital growth. The fund returned 6.54% over the last one year period and has a five year annualized return of 2.4%.

The fund manager is Michael P. Byrum and he has managed this energy fund since 1998.

Invesco Energy (FSTEX) seeks capital growth. At least 80% of its assets are used to purchase securities of companies whose primary operations are related to energy. This includes companies which produce or distribute conventional energy, as well as energy conservation and alternative energy companies. This energy fund has a ten year annualized return of 9.28%.

The energy fund has a minimum initial investment of $1,000 and an expense ratio of 1.16% compared to a category average of 1.68%.

To view the Zacks Rank and past performance of all energy funds, then click here.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds/mutualfund/

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