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 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 78.29% 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 growth over the long term. 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 has returned 56.80% over the last one year period.
The healthcare mutual fund has an expense ratio of 1.23% as compared to category average of 1.46%.
T. Rowe Price Health Sciences (PRHSX) invests the lion’s share of its assets in common stocks of companies whose primary operations are related to health sciences. The fund focuses on investing in large and mid-cap firms. The fund may also invest in foreign securities. The healthcare fund has returned 50.26% over the last one year period.
Taymour R. Tamaddon is the fund manager and has managed this non-diversified mutual fund since 2013.
Fidelity Select Pharmaceuticals (FPHAX) invests heavily in securities whose primary operations involve manufacture, sale, development or distribution of pharmaceuticals and drugs. The fund invests in the pharma sector taking into consideration the industry position of the issuer and the financial condition. The healthcare mutual fund has returned 35.64% over the last one year period.
As of December 2013, the healthcare mutual fund held 78 issues with 7.68% of its total assets invested in Sanofi ADR.
ProFunds Biotechnology UltraSector (BIPSX) seeks daily returns which are 150% of the daily return of the Dow Jones U.S. Biotechnology Index. To achieve the desired results, this fund invests in a mix of securities as well as derivatives. The healthcare mutual fund has returned 110.00% over the last one year period.
The healthcare mutual fund has an expense ratio of 2.68% as compared to category average of 2.09%.
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.
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