Buy These 3 Mutual Funds Powered by Energy Sector Gains

Rising tensions in the Middle East have sent crude oil prices soaring, fueling fears of an energy crisis and inflation. The Energy Select Sector SPDR (XLE) rose 2.1%, reflecting gains in energy-related stocks. 

Crude oil prices affect headline inflation figures. A sustained rise in crude oil prices can cause an increase in fuel, transport and production costs. As a result, the moderation in inflation could slow down even more and, as a consequence, expectations regarding interest rate cuts may be influenced, and monetary policy may be even more restrictive for a longer period. 

However, the environment for energy companies to benefit from higher crude prices is good, and energy mutual funds should perform well as they hold a diversified portfolio of companies such as explorers and producers as well as refiners and service companies that supply equipment to explore and produce crude oil. 

We have three energy funds, Vanguard Energy Opportunities Inv VGENX, Invesco SteelPath Invesco Energy Inv FSTEX and T. Rowe Price New Era PRNEX, which investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.

Vanguard Energy Opportunities Inv fund invests its net assets plus any borrowings for investment purposes in common stocks of companies principally engaged in energy-industry activities, including exploration, production, transmission, refining, storage, marketing, and control and measurement of energy or energy fuels; related component products and services; energy research or experimentation; and energy conservation or pollution control.

G. Thomas Levering has been the lead manager of VGENX since Jan. 16, 2020. Most of the fund’s holdings were in companies, such as Shell PLC (8.7%), ExxonMobil Holdings Corp (8.6%) and TotalEnergies SE (7.2%) as of April 30, 2026.

VGENX’s 3-year and 5-year annualized returns are 19.1% and 19.9%, respectively. Its net expense ratio is 0.45%. VGENX has a Zacks Mutual Fund Rank #1. 

To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds,please click here.

Invesco Energy Inv fund invests most of its net assets (plus any borrowings for investment purposes) in securities of issuers engaged in energy-related industries and in derivatives and other instruments with similar economic characteristics, primarily equity securities such as common stock.

Kevin C. Holt has been the lead manager of FSTEX since June 5, 2020. Most of the fund’s holdings were in companies, such as ExxonMobil Holdings Corp (11.1%), Chevron Corp (7%) and Shell PLC (6.8%) as of April 30, 2026.

FSTEX’s 3-year and 5-year annualized returns are 16.6% and 24.5%, respectively. Its net expense ratio is 1.22%. FSTEX has a Zacks Mutual Fund Rank #1.

T. Rowe Price New Era fund invests at least two-thirds of its net assets in common stocks of natural resource companies, whose earnings and tangible assets may benefit during periods of accelerating inflation.

Shinwoo Kim has been the lead manager of PRNEX since June 1, 2021. Most of the fund’s holdings were in companies, such as Exxon Mobil Corp (5.1%), Chevron Corp (5%) and ConocoPhillips (3.8%) as of March 31, 2026.

PRNEX’s 3-year and 5-year annualized returns are 11.1% and 11.2%, respectively. Its net expense ratio is 0.79%. PRNEX has a Zacks Mutual Fund Rank #1.

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