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 Health Care (FSPHX) seeks capital growth over long run. It invests majority of its assets in companies whose principal operations include production, design and marketing of health care related products or services. The fund focuses on acquiring common stocks and purchases both domestic and foreign securities depending on factors such as financial strength and economic conditions. This healthcare mutual fund is non-diversified and returned 39.38% over the last one year period.
The fund has an expense ratio of 0.76% as compared to category average of 1.38%.
Fidelity Select Medical Equipment & Systems (FSMEX) invests a lion’s share of its assets in companies that are primarily involved in medical equipment and devices and related technologies sector. The fund invests in both US and non-US companies. This healthcare mutual fund is non-diversified and returned 29.68% over the last one year period.
Edward Lee Yoon is the fund manager and has managed this healthcare mutual fund since 2007.
Fidelity Select Pharmaceuticals (FPHAX) seeks long-term capital growth. It invests heavily in firms all over the globe whose primary operations are related to manufacturing, selling, developing or distributing of pharmaceuticals and drugs. The fund invests in the pharma sector taking into consideration the industry position of the issuer and the financial condition. This healthcare mutual fund is non-diversified and returned 32.76% over the last one year period.
As of May 2014, this fund held 90 issues with 6.44% of its assets invested in AbbVie Inc.
Live Oak Health Sciences (LOGSX) invests largely in companies involved in healthcare related operations such as research, development and distribution of medicines. Although it invests in domestic companies, it may also invest in foreign firms including ADRs. This healthcare mutual fund returned 25.25% over the last one year period.
The fund has an expense ratio of 1.15% as compared to category average of 1.38%.
ProFunds UltraSector Health Care (HCPSX) seeks daily returns which are 150% of the daily return of the Dow Jones U.S. Pharmaceuticals SM Index. The fund invests in equity securities and derivatives that in the opinion of the fund advisors possess daily return characteristics identical to one and a half times the daily return of the Index. This healthcare mutual fund is non-diversified and returned 32.04% over the last one year period.
Michael Neches is the fund manager and has managed this healthcare mutual fund since 2013.
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 at http://www.zacks.com/funds.
Read the analyst report on FSPHX
Read the analyst report on FSMEX
Read the analyst report on FPHAX
Read the analyst report on LOGSX
Read the analyst report on HCPSX
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