The U.S. utilities sector saw a 14.5% increase in the State Street Utilities Select Sector SPDR ETF (XLU) in the 12 months ending Feb. 10, 2026. This growth is attributed to rising electricity consumption from AI and data center expansion, as well as macroeconomic factors like interest rate cuts and increased spending on grid upgrades. Geopolitical tensions have also highlighted the importance of domestic infrastructure investment.

Three utility mutual funds with Zacks Mutual Fund Rank #1 or 2, positive annualized returns, and low expense ratios are recommended. American Century Utilities (BULIX) focuses on equity investments in utilities, Fidelity Select Utilities (FSUTX) invests primarily in common stocks of utility companies, and Franklin Utilities A1 (FKUTX) invests in public utilities and related service providers.

BULIX, managed by Mattia Bacciardi, has 3-year and 5-year annualized returns of 10.3% and 7.8%, respectively, with a net expense ratio of 0.65%. FSUTX, managed by Pranay Kirpalani, has 3-year and 5-year annualized returns of 13.3% and 12.5%, respectively, with a net expense ratio of 0.65%. FKUTX, managed by John Kohli, has 3-year and 5-year annualized returns of 11.8% and 10.9%, respectively, with a net expense ratio of 0.70%.

Investors can receive key mutual fund information through Zacks’ free Fund Newsletter, providing updates on news, analysis, and top-performing mutual funds weekly. Zacks’ Research Chief has selected a stock with strong money-doubling potential, along with four other top recommendations. Interested individuals can access this information through the provided links for further details and analysis.

Read more at Nasdaq: 3 Utility Mutual Funds to Add Stability in a Volatile Market