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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.
Schwab Health Care ( SWHFX - MF report ) invests heavily in the healthcare sector. The fund primarily purchases 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 healthcare mutual fund has a three year annualized return of 15.54%.
Paul Alan Davis is the fund manager and has managed this healthcare mutual fund since 2006.
Delaware Healthcare A ( DLHAX - MF report ) seeks capital growth. The fund invests the majority of its assets in the healthcare sector. It purchases equity of both domestic and foreign companies regardless of their size. It may also invest in emerging market stocks. The health mutual fund has a three year annualized return of 16.55%.
As of June 2012, this health mutual fund held 41 issues, with 8.78% of its total assets invested in WellPoint Inc.
Putnam Global Health Care A ( PHSTX - MF report ) invests primarily in companies from the health care sector. Common stocks of large and midcap firms across the world constitute the majority of his investments. The fund may purchase both growth and value stocks. The healthcare mutual fund has a three year annualized return of 8.34%.
The healthcare mutual fund has a minimum initial investment of $500 and an expense ratio of 1.26% compared to a category average of 1.49%.
Vanguard Health Care Index ( VHCIX - MF report ) seeks to match the performance of the MSCI U.S. Investable Market Health Care 25/50 index and invests primarily in healthcare stocks. This index consists of stocks of companies of all sizes from this sector. The healthcare mutual fund has a three year annualized return of 14.36%.
Ryan E. Ludt is the fund manager and has managed this healthcare mutual fund since 2004.
Prudential Jennison Health Sciences A ( PHLAX - MF report ) invests a large share of its assets in firms from the health sciences domain. Equity and related securities of pharma companies, biotech firms, service providers and medical device manufacturers constitute its major investments. The healthcare mutual fund has a three year annualized return of 21.47%.
The healthcare mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.25% compared to a category average of 1.49%.
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 at http://www.zacks.com/funds.
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