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Which Healthcare Mutual Fund Should You Buy: PRHSX or AHSCX?
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One of the best ways to safeguard investments is by parking money in the healthcare sector. This is because demand for healthcare services does not change with market conditions. Many pharmaceutical companies also pay out regular dividends.
Companies that consistently offer dividends are financially stable and generate steady cash flows irrespective of market conditions. Mutual funds are the perfect choices for investors looking to enter this sector since they possess the advantages of wide diversification and analytical insight. As a matter of fact, the U.S. healthcare sector is anticipated to experience a major revolution in the days to come, courtesy of the ongoing coronavirus pandemic.
In such circumstances, investing in healthcare mutual funds seems prudent. However, choosing the right mutual funds for your portfolio can be quite tricky. To that end, let us find out which of the two funds discussed below is better.
This non-diversified fund invests more than 80% of its assets in common stocks of companies engaged in various activities in the field of healthcare, medicine or life sciences. The fund mostly invests in mid- and large-capitalization companies.
This Sector-Health product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the three and five-year benchmarks are 14.9% and 13%, respectively. To see how this fund performed compared in its category, and other #1 and #2 Ranked Mutual Funds, please click here.
Meanwhile, as of the last filing, Unitedhealth Group Inc. and Vertex Pharmaceuticals Inc were the top holdings for T. Rowe Price Health Sciences Fund.
This product, with a Zacks Rank #1 (Strong Buy), was incepted in December 1995 and is managed by T. Rowe Price. PRHSX requires a minimal initial investment of $2,500.
This fund aims for long-term capital growth. It invests the majority of its assets in equity securities of companies across different market capitalizations that are engaged in the health sciences sector. The fund may also invest in foreign securities.
This Sector-Health product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 15.7% over the three-year and 15.6% of the five-year period. To see how this fund performed compared in its category, and other #1 and 2 Ranked Mutual Funds, please click here.
Meanwhile, as of the last filing, Dexcom Inc and Unitedhealth Group Inc were the top holdings for Alger Health Sciences Fund Class C.
This product with a Zacks Mutual Fund Rank #1 (Strong Buy) was incepted in April 1998 and is managed by Alger Funds. AHSCX requires a minimal initial investment of $1,000.
To Conclude
While both AHSCX and PRHSX are buy-rated funds, upon having a closer look, we find that the former is a clear winner. PRHSX is way more expensive compared to AHSCX (it has a minimum initial investment $2,500 compared to FSMEX’s $1,000). Further, AHSCX has a 3-year beta of 0.83 compared to FSMEX’s 0.89. Therefore, for better returns at lower risk, one must opt for AHSCX.
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Which Healthcare Mutual Fund Should You Buy: PRHSX or AHSCX?
One of the best ways to safeguard investments is by parking money in the healthcare sector. This is because demand for healthcare services does not change with market conditions. Many pharmaceutical companies also pay out regular dividends.
Companies that consistently offer dividends are financially stable and generate steady cash flows irrespective of market conditions. Mutual funds are the perfect choices for investors looking to enter this sector since they possess the advantages of wide diversification and analytical insight. As a matter of fact, the U.S. healthcare sector is anticipated to experience a major revolution in the days to come, courtesy of the ongoing coronavirus pandemic.
In such circumstances, investing in healthcare mutual funds seems prudent. However, choosing the right mutual funds for your portfolio can be quite tricky. To that end, let us find out which of the two funds discussed below is better.
T. Rowe Price Health Sciences Fund (PRHSX - Free Report)
This non-diversified fund invests more than 80% of its assets in common stocks of companies engaged in various activities in the field of healthcare, medicine or life sciences. The fund mostly invests in mid- and large-capitalization companies.
This Sector-Health product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the three and five-year benchmarks are 14.9% and 13%, respectively. To see how this fund performed compared in its category, and other #1 and #2 Ranked Mutual Funds, please click here.
Meanwhile, as of the last filing, Unitedhealth Group Inc. and Vertex Pharmaceuticals Inc were the top holdings for T. Rowe Price Health Sciences Fund.
This product, with a Zacks Rank #1 (Strong Buy), was incepted in December 1995 and is managed by T. Rowe Price. PRHSX requires a minimal initial investment of $2,500.
Alger Health Sciences Fund Class C (AHSCX - Free Report)
This fund aims for long-term capital growth. It invests the majority of its assets in equity securities of companies across different market capitalizations that are engaged in the health sciences sector. The fund may also invest in foreign securities.
This Sector-Health product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 15.7% over the three-year and 15.6% of the five-year period. To see how this fund performed compared in its category, and other #1 and 2 Ranked Mutual Funds, please click here.
Meanwhile, as of the last filing, Dexcom Inc and Unitedhealth Group Inc were the top holdings for Alger Health Sciences Fund Class C.
This product with a Zacks Mutual Fund Rank #1 (Strong Buy) was incepted in April 1998 and is managed by Alger Funds. AHSCX requires a minimal initial investment of $1,000.
To Conclude
While both AHSCX and PRHSX are buy-rated funds, upon having a closer look, we find that the former is a clear winner. PRHSX is way more expensive compared to AHSCX (it has a minimum initial investment $2,500 compared to FSMEX’s $1,000). Further, AHSCX has a 3-year beta of 0.83 compared to FSMEX’s 0.89. Therefore, for better returns at lower risk, one must opt for AHSCX.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>