Income-seeking stock investors should look at the holdings of a not-so-well-known utility stock fund: FBR Gas Utility Index fund (GASFX). Though it is not well known, this fund is actually very popular in many income portfolios suggested by financial advisors.
The fund seeks to provide income and capital appreciation by replicating the performance of the American Gas Association Stock Index. It invests, under normal circumstances, at least 85% of net assets in the common stock of companies that have natural gas distribution and transmission operations.The fund has been managed by Winsor Aylesworth since 1998.
The following shows the fund's top holdings:
|YTD Return %|
|El Paso Corporation Common Stoc||EP||4.88||79.14|
|Spectra Energy Corp Common Stoc||SE||4.88||14.61|
|Dominion Resources, Inc. Common||D||4.80||21.44|
|Williams Companies, Inc. (The)||WMB||4.46||20.89|
|Sempra Energy Common Stock||SRE||4.44||1.83|
|ONEOK, Inc. Common Stock||OKE||4.28||35.86|
|Pacific Gas & Electric Co. Comm||PCG||3.81||-9.81|
The fund has a fantastic performance, as can be seen below. The table compares this fund with diversified asset allocation portfolios using dividend stocks.
Portfolio Performance Comparison
|Portfolio/Fund Name||1-Year AR||1-Year Sharpe||3-Year AR||3-Year Sharpe||5-Year AR||5-Year Sharpe|
|Retirement Income ETFs Strategic Asset Allocation Risk Profile 0||-4%||-33%||18%||66%||0%||-5%|
|Retirement Income ETFs Tactical Asset Allocation Risk Profile 0||-0%||-12%||13%||66%||10%||44%|
It is remarkable that the fund beats the strategic asset allocation moderate portfolio by a big margin (5-year 6% vs. 0%). Furthermore, it has been doing very well year-to-date, gaining 17% as of 11/28/2011.
One can expect the top 10 holdings portfolio will do well also as these top 10 holdings take up almost 47% of the fund's holdings. It is a worthwhile effort to begin with these 10 stocks to find good utility and dividend paying gems.
Disclaimer: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.