When markets are passing through choppy waters, investors often rely on the healthcare sector to safeguard their investments. This is because the demand for healthcare services does not vary with market conditions, making them a safe haven during difficult times. Many pharma companies also generate regular dividends, which go a long way in softening the blow dealt by plummeting share prices. Mutual funds are the perfect choice for investors looking to enter this sector since they possess the advantages of wide diversification and analytical insight.
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, investors can click here to see the complete list of funds.
Fidelity Select Medical Delivery (FSHCX) invests the majority of its assets in firms whose principal operations are related to managing or owning hospitals, nursing homes and other firms focusing on healthcare service delivery. The fund focusses on purchasing common stock. The healthcare mutual fund is non-diversified and has a one year annualized return of 7.65%.
The healthcare mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.84% compared to a category average of 1.48%.
Vanguard Health Care Index (VHCIX) seeks to provide returns identical to that of the MSCI US Investable Market Index (IMI)/Health Care 25/50 index. The fund invests in almost all or all of the stocks which are included in the index. The healthcare mutual fund has a one year annualized return of 28.63%. < p> Ryan E. Ludt is the fund manager and has managed this healthcare mutual fund since 2004.
Putnam Global Health Care A (PHSTX) invests the majority of its assets in common stocks of large and mid-cap firms across the world. The fund invests in firms which produce healthcare supplies or provide services related to healthcare. The healthcare mutual fund has a one year annualized return of 30.65%.
As of March 2013, this healthcare mutual fund held 96 issues, with 7.25% of its total assets invested in Johnson & Johnson.
Rydex Biotechnology (RYOIX) seeks capital growth. The fund invests a large share of its assets in equity securities and derivatives issued by domestic biotechnology companies. It focuses on small and mid-cap biotechnology companies. It is non-diversified and seeks capital growth. The healthcare mutual fund has a one year annualized return of 39.71%. < p> The healthcare mutual fund has an expense ratio of 1.36% compared to a category average of 1.48%.
Franklin Biotechnology Discovery A (FBDIX) invests the majority of its assets in biotechnology firms and drug discovery research companies. The fund focusses on acquiring equity securities, especially common stock. A maximum of 20% of its assets may be invested in equity or debt securities from other sectors. The healthcare mutual fund is non-diversified and has a one year annualized return of 39.12%.
’ Evan McCulloch is the fund manager and has managed this healthcare mutual fund since 1997.
To view the Zacks Rank and past performance of all health mutual funds, investors can click here to see the complete list of funds.
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.
More From Zacks.com