As the global appetite for energy continues to increase rapidly, governments and corporations alike are devoting greater resources for the discovery of new energy sources as well as the development of more efficient technology in this domain. In fact, newer economic powerhouses such as China are discovering that the going is even tougher for them. Prices of these invaluable resources continue to rise at a steady rate and the energy sector is clearly a lucrative investment option. Mutual funds are a superior option for forays into the industry as they reduce risks involved by holding widely diversified portfolios.

Below we will share with you 3 favorably rated energy mutual funds. Each has earned a Zacks #2 Rank (Buy) as we expect these mutual funds to outperform their peers in the future.

Columbia Global Energy & Natural Resources A (MUTF:EENAX ) invests a major portion of its assets in equities of both domestic and foreign firms involved in the energy and natural resources industries. The fund invests a minimum of half of its assets in companies engaged in operation related to crude oil, petroleum and natural gas. This non-diversified energy mutual fund has a five-year annualized return of 3.2%. As of September 2014, this fund held 86 issues with 5.16% of its assets invested in Exxon Mobil Corporation

BlackRock All-Cap Energy & Resources Service (MUTF:BACSX ) seeks long term capital appreciation. The fund invests a heavily in equity securities of energy and natural resources companies located all over the globe. It also invests companies involved in associated businesses, including utilities such as gas, water, cable, electrical and telecommunications. This non-diversified energy mutual fund primarily invests in three countries and has a five-year annualized return of 3%.

This fund has an expense ratio of 1.33% as compared to the category average of 1.53%.

ICON Energy A (MUTF:ICEAX ) invests a lion’s share of its assets in equities of companies engaged in the energy sector. These equities include common stocks and preferred stocks of companies of any market capitalization. It seeks capital growth over the long run. This non-diversified energy mutual fund has a five-year annualized return of 4%.

Derek Rollingson is the fund manager and has managed this fund since 2007.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the ZacksMutual Fund Rank in our Mutual Fund Center .