Investors often rely on the healthcare sector to safeguard their investments. This is because demand for healthcare services does not vary so much with market conditions and investments in the sector provide sufficient protection to the capital invested.
Many pharma companies also pay out regular dividends. These companies are financially stable and generate consistent cash flows irrespective of market conditions. Mutual funds are perfect choices for investors looking to enter this sector since they have the advantages of wide diversification and analytical insight.
Below we share with you three top-ranked healthcare mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of healthcare funds.
Delaware Healthcare A (DLHAX - MF report) seeks long-term capital growth. DLHAX invests a large portion of its assets in equity securities of health care companies. These companies produce and distribute products that are required in medical industries. Delaware Healthcare A is non-diversified and has a three-year annualized return of 10.4%.
Liu-Er Chen is the lead manager and has managed DLHAX since 2007.
Fidelity Select Medical Equipment & Systems (FSMEX - MF report) invests the majority of its assets in companies that are primarily involved in medical equipment and devices, and the related technologies sector. FSMEX focuses on acquiring common stocks of companies by analyzing factors including financial strength and economic condition. The fund invests in both U.S. and non-U.S. companies. Fidelity Select Medical Equipment & Systems is a non-diversified fund and has a three-year annualized return of 20.5%.
As of August 2016, FSMEX held 63 issues with 20.76% of its assets invested in Medtronic PLC.
Schwab Health Care (SWHFX - MF report) seeks long-term capital appreciation. SWHFX invests a large portion of its assets in equity securities issued by companies in the health care sector. Biotechnology companies, health care facilities, medical product manufacturers and suppliers, medical providers and medical services firms are all part of the healthcare sector. Schwab Health Care has a three-year annualized return of 11.8%.
SWHFX has an expense ratio of 0.79% compared with the category average of 1.29%.
To view the Zacks Rank and past performance of all healthcare mutual funds, investors can click here to see the complete list of healthcare funds.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>