The healthcare sector is one of the most desirable avenues for parking investments when markets are headed south. The demand for such services usually remains unchanged even during an economic downturn and investments in the sector provide sufficient protection to the capital invested. Several pharmaceutical companies also provide regular dividends, which can help mitigate losses from falling share prices. Healthcare mutual funds provide the perfect avenue for investors looking to invest in this sector.
Below we will share with you 5 top rated health mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all health funds, then click here.
Fidelity Select Medical Equipment & Systems (NASDAQ:FSMEX - News) seeks capital growth by investing heavily in the healthcare sector. The fund primarily invests in securities of companies which produce, distribute or develop medical equipment, devices and related technologies. It is non-diversified and may invest in foreign securities. The healthcare mutual fund has a three year annualized return of 13.02%.
The healthcare mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.86% compared to a category average of 1.57%.
Manning & Napier Life Sciences (EXLSX) invests heavily in securities of companies from the life sciences sector. Domestic and foreign equity, ADRs and U.S. dollar denominated foreign securities make up the majority of its assets. The healthcare mutual fund has a three year annualized return of 17.3%.
As of September 2011, this health mutual fund held 33 issues, with 5.08% of its total assets invested in Myriad Genetics, Inc.
Vanguard Health Care Index (NASDAQ:VHCIX - News) seeks to match the performance of the MSCI U.S. Investable Market Health Care 25/50 index and invests primarily in healthcare stocks. This index consists of stocks of companies of all sizes from this sector. The healthcare mutual fund has a three year annualized return of 12.57%.
Ryan E. Ludt is the fund manager and he has managed this healthcare mutual fund since 2004.
ProFunds Pharmaceuticals UltraSector (NASDAQ:PHPSX - News) invests in equity securities and derivatives which together should provide daily returns which are 150% of the daily return of the Dow Jones U.S. Pharmaceuticals Index. The balance of the fund’s assets is utilized to purchase money market securities. The healthcare mutual fund has a three year annualized return of 14.95%.
The healthcare mutual fund has an expense ratio of 2.73% compared to a category average of 1.57%.
Schwab Health Care (NASDAQ:SWHFX - News) seeks capital appreciation over the long term. The fund invests the majority of its assets in the healthcare sector. It primarily purchases equity securities but may also invest in future contracts. It focuses on investing in domestic firms, but may invest up to 25% of its assets in other countries. The healthcare mutual fund has a three year annualized return of 13.71%.
Paul Alan Davis is the fund manager and he has managed this healthcare mutual fund since 2006.
To view the Zacks Rank and past performance of all health mutual funds, then click here.
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 Zacks Mutual Fund Rank at http://www.zacks.com/funds.
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