Is Hennessy Gas Utility Investor (GASFX) a Strong Mutual Fund Pick Right Now?

Zacks categorizes GASFX in Sector - Utilities, which is a segment packed with options. Known for its stability, the utility industry is perfect for investors seeking low risk. Sector - Utilities mutual funds focus on companies that provide essential services to millions of people on a daily basis: think electric power, gas distribution, and water supply.

History of Fund/Manager

Hennessy is responsible for GASFX, and the company is based out of Novato, CA. Hennessy Gas Utility Investor made its debut in May of 1989, and since then, GASFX has accumulated about $445.77 million in assets, per the most up-to-date date available. The fund's current manager, Ryan Kelley, has been in charge of the fund since March of 2013.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 11.73%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 14.84%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of GASFX over the past three years is 12.76% compared to the category average of 12.63%. Looking at the past 5 years, the fund's standard deviation is 15.02% compared to the category average of 14.24%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.52, the fund is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. GASFX's 5-year performance has produced a positive alpha of 3.23, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, GASFX is a no load fund. It has an expense ratio of 0.97% compared to the category average of 0.97%. So, GASFX is actually on par with its peers from a cost perspective.

While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Hennessy Gas Utility Investor ( GASFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and on par fees, Hennessy Gas Utility Investor ( GASFX ) looks like a good potential choice for investors right now.

This could just be the start of your research on GASFX in the Sector - Utilities category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.

Beyond Nvidia: AI's Second Wave Is Here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research