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.
Putnam Global Health Care A (PHSTX) seeks to provide capital growth. The fund primarily invests in growth, value stocks or either type of stocks of mid and large cap healthcare companies. The companies may be ones that provide health care related services, or those who develop or manufacture pharmaceuticals and biotechnology products. The healthcare mutual fund returned 41.72% over the last one year period.
The healthcare mutual fund has an expense ratio of 1.21% compared to a category average of 1.44%.
Fidelity Select Biotechnology (FBIOX) invests the majority of its assets in companies involved in the research, manufacture and distribution of biotechnological products, services, and processes. The fund also invests in companies that gain from technological developments in the arena. The mutual fund is non-diversified and returned 65.66% over the last one year period.
Rajiv Kaul is the fund manager and has managed this healthcare mutual fund since 2005.
Prudential Jennison Health Sciences A (PHLAX) seeks long-term growth. This non-diversified fund utilizes the bulk of its assets to purchase equity securities of companies in the health sciences sector. The fund may invest over 5% of assets in a single issuer. The healthcare mutual fund returned 55.88% over the last one year period.
As of November 2013, this healthcare mutual fund held 97 issues, with 5.70% of its total assets invested in Biomarin Pharmaceutical, Inc.
Schwab Health Care (SWHFX) invests the majority of its assets in equity securities of health care sector companies. The fund focuses on domestic companies and uses Schwab Equity Ratings to select stocks. A maximum of 25% of its assets may be invested in foreign publicly-traded companies. The healthcare mutual returned 39.95% over the last one year period.
The healthcare mutual fund has an expense ratio of 0.82% compared to a category average of 1.44%.
Vanguard Health Care Index (VHCIX) seeks to duplicate the returns of the MSCI US Investable Market Index (IMI)/Health Care 25/50 index. The fund invests in almost all or all of the stocks that are listed in the index. The non-diversified healthcare mutual fund returned 42.68% over the last one year period.
Ryan Ludt is the fund manager and has managed this healthcare mutual fund since 2004.
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.
Read the analyst report on HCPSX
Read the analyst report on FSPHX
Read the analyst report on VCHSX
Read the analyst report on PHSTX
Read the analyst report on FBDIX
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