The findings were very conclusive and for the most part, not surprising. This hot sector includes such high-flying stocks as Nokia, Nextel and MCI Worldcom, which also happen to be categorized as phone companies and thus can fit in with a utility fund's investment objective. On the same graph, both the Dow Jones Utility Index and the Dow Jones Communications Index are also displayed. As the individual charts reveal, the first group outperformed the second group and was more in line with the performance of the Dow Jones Communications Index, especially last year as more utility fund managers loaded up on telecom and wireless shares. Utility funds with heavy allocations in the communications sector do not violate any SEC rules.
Phone companies are utilities after all.
However, it is important to know how similar funds in the same category could perform so differently. For investors, it is even of more importance to know what to expect from their utilities funds if the sector takes a big hit or gains momentum. A list of all utility funds and their tickers can be found under the Fund Studies section titled Utilities Funds.