In this topsy-turvy world, characterized by unprecedented tariffs, rapidly changing policies, spending cuts, geopolitical risk, high deficits, and elevated valuations, I tend to be more conservative. I have added toggles to my “Rate and Rank” spreadsheet, allowing me to evaluate funds through the lenses of “Risk Off” and “Yield” for a conservative, tax-advantaged account. Table #1 shows how I rank sector Lipper Categories from highest-ranked category to lowest, along with the highest-ranked five funds. Some sectors are in bubble territory, or there is speculative momentum.
Table #1: Sector Fund Performance – Six Years
Source: Author using MFO Premium fund screener and Lipper global dataset.
Utility funds tend to have higher risk-adjusted returns over the long term because we like to have heat in the winter, air conditioning during summer, lights at night, and refrigerators to chill our favorite foods and beverages. I am working on a conservative portfolio as described in this month’s companion article, but am not above investing a token amount in sector funds of interest.
Table #2 contains Virtus Reaves Utilities ETF (UTES) and Lazard Global Listed Infrastructure Portfolio Open (GLFOX), which are worth considering to complement a conservative portfolio. The utility fund has had slightly better total and risk-adjusted returns.
Table #2: Selected Sector Fund Performance – Ten Years
Source: Author using MFO Premium fund screener and Lipper global dataset.
Figure #1 shows the performance of Virtus Reaves Utilities ETF (UTES) and Lazard Global Listed Infrastructure Portfolio Open (GLFOX) for the past six years
Figure #1: Selected Sector Fund Performance – Six Years
Source: Author using MFO Premium fund screener and Lipper global dataset.
Virtus Investment Partners “is a distinctive partnership of boutique investment managers, singularly committed to the long-term success of individual and institutional investors.” They have $15B in assets under management according to data from MFO and “$170.71 billion managed in a multi-boutique structure” according to the website. The Fact Sheet states, “Reaves Asset Management was founded in 1961 and is an employee-owned, research-based investment management company, with over 40 years of experience managing money.”
The Lazard Asset Management LLC website summarizes GLFOX as, “The Lazard Global Listed Infrastructure Portfolio seeks total return by investing in a select universe of ‘Preferred Infrastructure’ companies. The team believes that these companies have the potential to achieve lower volatility returns that exceed inflation and that a portfolio of Preferred Infrastructure companies presents a potential diversification opportunity. The Portfolio may be a powerful complement to real assets, private equity infrastructure, and global equity allocations.” It currently has 26 holdings with 20% invested in the U.S.
Closing
My next purchase decision will be in December, so I have time to wait and watch. My focus is on building a conservative portfolio for the long-term, which either of these funds might fit into. The Moving Average Convergence Divergence (MACD) for Virtus Reaves Utilities ETF (UTES) currently suggests that there may be an opportunity to buy UTES during a dip.
