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American Century Utilities Offers Income in Your IRA

BULIX is a cheap buy with strong performance


The American Century Utilities Investor Class Fund (MUTF: BULIX) is an IRA mutual fund that invests in stocks of companies engaged in the utilities industry. It may appeal to investors looking for income, as well as long-term capital appreciation.

Here are the specifics for the American Century Utilities Investor Class Fund for today’s mutual fund spotlight:

Investing Strategy: In addition to stocks, the fund will invest in stock futures contracts and stock index futures contracts. Almost all of its assets are held in stocks. The remainder is held in cash.

Expense Ratio: The fund has an expense ratio of 0.7% and no transaction fee, which makes it among the cheaper funds in the utilities sector category. It has a Morningstar rating of 4 stars

Top 5 Holdings: The top stocks in the American Century Utilities Investor Class Fund include telecom providers AT&T (NYSE: T) at 8.89%, Verizon Communications (NYSE: VZ) at 8.24% and CenturyLink (NYSE: CTL) at 3.15%, electronic and gas services holding company Public Service Enterprise Group (NYSE: PEG) at 2.97% and diversified energy company ONEOK, Inc. (NYSE: OKE) at 2.91%

Returns: The American Century Utilities Investor Class Fund’s 12-month return of 20% outperformed the broader market’s 17%. Its 5-year return of 14.18% also outperformed the Dow Jones Industrial Average’s 8.59% return and the S&P 500’s 1.92% return during the period.

Other Fund Statistics

  • Total Assets: $286.14 million (as of 6/27/11)
  • Minimum Investment: $2,500
  • Fund manager: William Martin and Lynette Pang
  • Manager’s Tenure: Since August and December 2010, respectively

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