Oil mutual funds present an attractive opportunity in the current scenario. With global energy demand steadily rebounding, oil prices remain well-supported despite market volatility. Geopolitical tensions, supply constraints from OPEC+ cuts, and underinvestment in new oil projects have created a favorable supply-demand imbalance. At the same time, inflationary pressures make commodities, including oil, a strong hedge against eroding purchasing power.
In an inflationary environment, oil serves as a good hedge. While the long-term trend is toward clean energy, the transition will take decades, ensuring oil remains vital for the global economy. Oil mutual funds offer a way to invest in this critical sector and benefit from strong company earnings, dividends, and share buybacks without the risk of picking individual stocks. For investors seeking growth, diversification, and inflation protection, oil mutual funds offer a timely and strategic investment choice in today’s uncertain economic environment.
Below, we share with you three top-ranked energy mutual funds, viz., Invesco SteelPath MLP Select 40 MLPFX, Victory Global Energy Transition Fund RSNRX and Vanguard Specialized Portfolios Energy Fund VGENX. Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of energy mutual funds.
Invesco SteelPath MLP Select 40 fund invests most of its assets, along with borrowings, if any, in master limited partnerships of companies engaged in the transportation, storage, processing, refining, marketing, exploration, production, and mining of minerals and natural resources. MLPFX advisors also invest in derivatives and other instruments with similar economic characteristics in the same industry.
Invesco SteelPath MLP Select 40 fund has three-year annualized returns of 19.2%. As of the end of August 2025, MLPFX had 44 issues and invested 7.8% of its net assets in Energy Transfer.
Victory Global Energy Transition Fund invests most of its net assets in domestic and foreign companies that its sub-advisors SailingStone Capital Partners LLC, believe are principally engaged in natural resources industries. RSNRX is a non-diversified fund.
Victory Global Energy Transition Fund has three-year annualized returns of 18.7%. RSNRX has an expense ratio of 1.48%.
Vanguard Specialized Portfolios Energy Fund invests most of its net assets in common stocks of companies that are engaged in the energy industry. VGENX advisors prefer to invest in companies involved in exploration, production, transmission, energy research and conservation and pollution control.
Vanguard Specialized Portfolios Energy Fund has three-year annualized returns of 12.8%. G. Thomas Levering has been the fund manager of VGENX since January 2020.
To view the Zacks Rank and the past performance of all energy mutual funds, investors can click here to see the complete list of energy mutual funds.
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