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Mutual Fund Commentary

The healthcare sector is one of the most desirable avenues for parking investments when markets are headed south. The demand for such services usually remains unchanged even during an economic downturn and investments in the sector provide sufficient protection to the capital invested. Several pharmaceutical companies also provide regular dividends, which can boost current income for investors. Healthcare mutual funds provide the perfect avenue for investors looking to invest in this sector.

Below we will share with you 5 top rated healthcare 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.

Fidelity Select Biotechnology (FBIOX - MF report) invests a majority of its assets in common stocks of companies which are primarily involved in research and development as well as production and distribution of products from the biotechnology space of the healthcare sector. It focuses on domestic as well as foreign securities. The healthcare mutual fund has a one year annualized return of 61.09%.

Rajiv Kaul is the fund manager and has managed this healthcare mutual fund since 2005.

Rydex Biotechnology (RYOIX - MF report) seeks capital growth by investing predominantly in equity shares issued by domestic biotechnology companies. It primarily focuses on small and mid-cap companies. The fund also invests in derivative products. The healthcare mutual fund has a one year annualized return of 56.41%. < p> As of October 2012, this healthcare mutual fund held 46 issues, with 9.98% of its total assets invested in Amgen Inc.

Franklin Biotechnology Discovery A (FBDIX - MF report) invests the majority of its assets in equity shares of biotechnology companies and research entities. The fund may also invest some of its assets in non-biotechnology companies. The healthcare mutual fund has a one year annualized return of 54.02%.

The healthcare mutual fund has a minimum initial investment of $ 1,000 and an expense ratio of 1.26% compared to a category average of 1.52%.

VALIC Company I Health Sciences (VCHSX - MF report) seeks capital appreciation by investing a majority of its assets in common stocks of companies from the healthcare sector with a primary focus on large and mid-cap companies. The healthcare mutual fund has a one year annualized return of 48.01%.

Kris H. Jenner is the fund manager and has managed this healthcare mutual fund since 2000.

T. Rowe Price Health Sciences (PRHSX - MF report) invests the majority of its assets in common stocks of companies from the healthcare sector. The fund focuses on investing in large and mid-cap firms. It may also invest in foreign securities. The healthcare mutual fund has a one year annualized return of 47.93%.

The healthcare mutual fund has a minimum initial investment of $ 2,500 and an expense ratio of 0.82% compared to a category average of 1.52%.

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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