During difficult market conditions, investors often depend on the healthcare sector to safeguard their investments. Since the demand for healthcare and related services does not vary with market conditions, they are a safe haven during tough times. Many pharmaceutical companies also generate regular dividends, which aid in combating losses from falling share prices. Mutual funds are the perfect choice for investors looking to enter this sector since they posses the analytical insight needed to keep abreast of the latest advancements in this domain.

Below we will share with you the 5 best performing healthcare mutual funds year to date. To view the Zacks Rank and past performance of all healthcare funds, then click here.

Mutual Fund	Zacks Rank	Total Return YTD
ProFunds Pharmaceutical Ultra	#1 Strong Buy	9.5%
Vangard Health Care	#1 Strong Buy	9.1%
Saratoga Health & Biotechnology A	#1 Strong Buy	8.2%
Schwab Health Care	#1 Strong Buy	8.1%
Fidelity Select Medical Discovery	#1 Strong Buy	7.8%

ProFunds Pharmaceuticals UltraSector ( PHPSX - MF report ) invests in equity securities and derivatives which together should provide daily returns which are 150% of the daily return of the Dow Jones U.S. Pharmaceuticals Index. The balance of the fund’s assets are utilised to purchase money market securities. The healthcare mutual fund returned 21.7% over the last one year period.

The healthcare mutual fund has a minimum initial investment of $15,000 and an expense ratio of 2.71% compared to a category average of 1.60%.

Vanguard Health Care ( VGHCX - MF report ) seeks capital growth over the long term. The fund invests at least 80% of its assets in equity securities of companies primarily involved in developing, producing or distributing products and services for the health care sector. Not more than half of its assets may be utilized to purchase foreign securities. It is a no-load fund.

This healthcare mutual fund has a three year annualized return of 5.85%.

Saratoga Health & Biotechnology A ( SHPAX - MF report ) invests heavily in stocks of domestic and foreign healthcare and biotech firms of all sizes. Common and preferred stocks and related convertible securities constitute its major investments. The healthcare mutual fund is non-diversified and has a five year annualized return of 6.66%.

As of July 2011, this healthcare mutual fund held 29 issues, with 7.11% of its total assets invested in Biogen Idec Inc.

Schwab Health Care ( SWHFX - MF report ) seeks capital appreciation by investing heavily in the healthcare sector. The fund primarily purchase equity securities but may also invest in future contracts. It focuses on investing in domestic firms, but may invest up to 25% of its assets in other countries. The health mutual fund has a ten year annualized return of 7.08%.

The fund manager is Paul Alan Davis and he has managed this healthcare mutual fund since 2006.

Fidelity Select Medical Delivery ( FSHCX - MF report ) invests in firms engaged in the delivery of health care services. Such companies include those which manage hospitals, nursing homes health maintenance organisations and other firms focussing on delivery of healthcare services. It is non-diversified and may also purchase foreign securities. The healthcare mutual fund returned 36.94% over the last one year period.

The healthcare mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.88% compared to a category average of 1.60%.

To view the Zacks Rank and past performance of all healthcare mutual funds, then click here.

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 at http://www.zacks.com/funds