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.
Rydex Biotechnology Investor (RYOIX - MF report) invests the majority of its assets in domestic biotechnology companies. Investments are also parked in derivatives, primarily futures and options. The fund focuses on investing in small cap and mid cap companies. This healthcare mutual fund returned 61.04% over the last one year period.
The non-diversified fund has an expense ratio of 1.35% as compared to category average of 1.44%.
ProFunds UltraSector Health Care (HCPSX - MF report) seeks daily returns which are 150% of the daily return of the Dow Jones U.S. Biotechnology 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 Dow Jones U.S. Health Care Index. The fund returned 54.89% over the last one year period.
Michael Neches is the fund manager and has managed this fund since 2013.
Fidelity Select Health Care (FSPHX - MF report) invests the majority of its assets in companies whose principal operations include production, design and sales of health care related products or services. The fund focuses on acquiring common stocks and purchases both domestic and foreign securities. The healthcare mutual fund returned 62.68% over the last one year period.
As of January 2014, this healthcare fund held 105 issues with 5.56% of its total assets invested in Gilead Sciences Inc.
Vanguard Health Care Index (VHCIX - MF report) seeks to provide returns identical to that of the MSCI US Investable Market Index (IMI)/Health Care 25/50 index. The fund invests in almost all or all of the stocks which are included in the index. This non-diversified healthcare mutual fund returned 38.40% over the last one year period.
Ryan E. Ludt is the fund manager and has managed this fund since 2004.
Fidelity Select Pharmaceuticals (FPHAX - MF report) 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 43.65% over the last one year period.
The fund has an expense ratio of 0.84% as compared to its category average of 1.44%.
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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