Portfolio Management
As investors flock towards safer, yield-friendly investments, we have chosen Prudential Jennison Utility Fund (PRUAX) to be the fund of the week for October 15.
This fund focuses on the utility sector and currently has $3.6 billion in assets under management (AUM).
Inside the Fund
The Prudential Jennison Utility Fund (PRUAX) was launched in January 1990 and is currently managed by Shaun Hong, Ubong Edemeka and Teresa Ho Kim. Nearly 60% of this fund is composed of utility stocks and around 28% of its portfolio is compiled of energy stock holdings. This can be considered a yield focused fund. Currently, its dividend yield is approximately 2.60%.
The fund focuses primarily on holdings based in the Americas (93%), although it does have small stakes in Europe and Asia.
It’s also notable that the fund is fully invested – with just less than 1% of its portfolio in cash.
Historical Performance
| 2010 | 2011 | 2012 | 2013 | YTD |
|---|---|---|---|---|
| 14.44% | 7.92% | 13.24% | 26.22% | 18.38% |
Prudential Jennison Utility Fund’s Largest Holdings
The fund’s top five holdings represent over 17% of its total portfolio. Although this is a utility-focused fund, the top three holdings are energy stocks.
| Symbol | Stock | Portfolio Weight | Dividend Yield |
|---|---|---|---|
| WMB | Williams Companies | 3.82% | 4.60% |
| TRGP | Targa Resources Corp | 3.78% | 2.43% |
| ETE | Energy Transfer Equity LP | 3.76% | 3.07% |
| EIX | Edison International | 3.06% | 2.38% |
| SRE | Sempra Energy | 3.04% | 2.60% |
The Bottom Line
With uncertainty in the markets and interest rates trending downward, investors have been entering positions in the utility sector. The Prudential Jennison Utility Fund is a solid choice for mutual fund investors seeking the diversification of a mutual fund, while still gaining exposure to the utility sector.
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