Top Health Equity Funds

Today we are featuring top-performing "Health" equity mutual funds, which primarily invest in equity securities of healthcare and related companies.

Investors can find such funds by checking out the entire list of the Zacks #1 Rank Health Equity Funds.

3 Healthy Picks

Morgan Stanley Health Sciences A (HCRAX) seeks capital appreciation. The fund normally invests at least 80% of assets in common stocks (including depositary receipts) of health science companies throughout the world.

Michael Nolan has been the lead manager at the fund since June 2008. The fund has an expense ratio of 1.50%. It distributes dividends annually.

The fund's top holdings include Johnson & Johnson (JNJ - Analyst Report), Pfizer Inc. (PFE - Analyst Report) and Merck & Co. Inc. (MRK - Analyst Report).

Fidelity Advisor Health Care A (FACDX) was incepted in September 1996 and seeks capital appreciation. It is non-diversified.

The fund normally invests in common stocks and may invest in securities of foreign and domestic issuers. As of January 2009, its portfolio turnover was 134%. Dividend and capital gains, if any, are distributed annually in December.

Wyeth (WYE), Pfizer Inc. (PFE - Analyst Report) and Genentech Inc. (DNA) are among its top holdings.

Kinetics Medical Adv A (KRXAX) seeks long-term growth of capital. The fund primarily invests in common stocks, convertible securities, warrants and other securities such as ADRs and IDRs of U.S. and foreign companies engaged in healthcare industry.

This non-diversified fund has topped its benchmark index in terms of total annual returns in the last 1-, 3- and 5-year periods. Unit holders have to make a minimum initial investment of $2,500 to enter the fund.

Its key holdings include Biogen Idec Inc. (BIIB - Analyst Report), Johnson & Johnson (JNJ - Analyst Report) and Genzyme Corp. (GENZ - Analyst Report)

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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.