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.
ProFunds Biotechnology UltraSector (BIPSX) invests in a combination of securities and derivatives which can provide 150% of the returns provided by the Dow Jones U.S. Biotechnology Index. The healthcare mutual fund is non-diversified and has a one year annualized return of 101.46%.
’ The healthcare mutual fund has a minimum initial investment of $15,000 and an expense ratio of 2.73% compared to a category average of 1.46%.
Invesco Global Health Care A (GGHCX) seeks capital growth. The fund invests most of its assets in foreign companies whose primary operations are related to healthcare sector. The fund purchases securities without regard to the issuer’s market capitalization. However, it focusses on investing in small and mid-cap companies. The healthcare mutual fund has a one year annualized return of 52.49%.
Rajiv Kaul is the fund manager and has managed this healthcare mutual fund since 2005.
Rydex Biotechnology (RYOIX) invests the majority of its assets in domestic biotechnology companies. Investments are also parked in derivatives, primarily futures and options. The fund focusses on investing in small cap and mid cap companies. This healthcare mutual fund has a one year annualized return of 45.90%.
As of May 2013, this healthcare mutual fund held 51 issues, with 8.39% of its total assets invested in GiLead Sciences Inc.
Franklin Biotechnology Discovery A (FBDIX) seeks capital growth. The majority of its assets is invested in equity of biotechnology and research companies. A maximum of 20% can also be invested in equity or debt securities of domestic or foreign companies. The non-diversified healthcare mutual fund has a one year annualized return of 44.65%. The healthcare mutual fund has an expense ratio of 1.26% compared to a category average of 1.46%.
Fidelity Select Biotechnology (FBIOX) invests a large share of its assets in companies whose primary operations are related to healthcare. Investments are made irrespective of the market cap of companies. However, maximum investments are parked in small and mid-cap companies. Investments can also be made in foreign companies. The healthcare mutual fund has a one year annualized return of 39.33%.
Paul Alan Davis is the fund manager and has managed this healthcare mutual fund since 2006.
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.
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