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Recent inflation and labor market data support a positive outlook for the healthcare sector. The November 2025 year-over-year Consumer Price Index (CPI) rose 2.7%, down from 3.0% in September, while the core CPI stayed at 2.6%. This supports the belief that prices are decreasing without causing a rapid economic downturn.
The market environment benefits the healthcare sector because its defensive market trends and fixed pricing structures create a favorable business scenario. People choose to spend their money on vital medical needs instead of acquiring nonessential items when economic conditions become unstable. The healthcare industry also maintains stable revenue streams because hospital services, prescription drugs and medical treatments show limited price sensitivity to changes in demand.
The Labor Department reported on Thursday that initial jobless claims fell to 224,000, a decrease of 13,000 for the week ending Dec. 13, suggesting some normalization. The insured unemployment rate held steady at 1.2%, implying that the labor market remained stable while continuing claims reached 1,897,000 during the week ending Dec. 6, increasing 67,000 from the previous week’s revised level. Overall, the employment data indicate that workers are largely retaining their jobs, without significant layoffs. This stable employment situation strengthens the case for investing in a healthcare mutual fund, as steady job retention supports consistent demand for healthcare services.
We have chosen three healthcare mutual funds — Fidelity Select Biotechnology Portfolio (FBIOX - Free Report) , Franklin Biotechnology Discovery Fund (FBDIX - Free Report) and PGIM Jennison Health Sciences (PHLAX - Free Report) — that investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.
Fidelity Select Biotechnology Portfolio fund seeks capital appreciation. FBIOX invests most of its assets in common stocks of companies principally engaged in the research, development, manufacture, and distribution of various biotechnological products, services, and processes and companies that benefit significantly from scientific and technological advances in biotechnology.
Rajiv Kaul has been the lead manager of FBIOX since Oct. 12, 2005. Most of the fund's holdings were in companies like AbbVie Inc. (16.7%), Amgen Inc. (8.2%) and Gilead Sciences, Inc. (8.1%) as of Aug. 31, 2025.
FBIOX's 3-year and 5-year returns are 16.9% and 4.7%, respectively. The annual expense ratio is 0.63%. FBIOX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
Franklin Biotechnology Discovery Fund seeks capital appreciation. FBDIX invests most of its net assets in equity securities of biotechnology companies and discovery research firms.
Evan S. McCulloch has been the lead manager of FBDIX since Sept. 15, 1997. Most of the fund's holdings were in companies like Gilead Sciences, Inc. (7.5%), Vertex Pharmaceuticals Inc (6.6%) and Amgen Inc. (5.8%) as of July 31, 2025.
FBDIX's 3-year and 5-year returns are 22.4% and 7.3%, respectively. The annual expense ratio is 1.01%. FBDIX has a Zacks Mutual Fund Rank #1.
PGIM Jennison Health Sciences fund seeks long-term capital appreciation. PHLAX invests in equity-related securities of U.S. companies within a specific group of industries.
Debra Netschert has been the lead manager of PHLAX since Jan. 28, 2015. Most of the fund’s holdings were in Eli Lilly and Co. (13.1%), Thermo Fisher Scientific Inc. (5.2%) and Vertex Pharmaceuticals Inc. (4.4%)as of Aug. 31, 2025.
PHLAX’s 3-year and 5-year annualized returns are 14.3% and 8.9%, respectively. Its net expense ratio is 1.15%. PHLAX has a Zacks Mutual Fund Rank #2.
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Buy 3 Healthcare Mutual Funds Amid Cooling Inflation
Recent inflation and labor market data support a positive outlook for the healthcare sector. The November 2025 year-over-year Consumer Price Index (CPI) rose 2.7%, down from 3.0% in September, while the core CPI stayed at 2.6%. This supports the belief that prices are decreasing without causing a rapid economic downturn.
The market environment benefits the healthcare sector because its defensive market trends and fixed pricing structures create a favorable business scenario. People choose to spend their money on vital medical needs instead of acquiring nonessential items when economic conditions become unstable. The healthcare industry also maintains stable revenue streams because hospital services, prescription drugs and medical treatments show limited price sensitivity to changes in demand.
The Labor Department reported on Thursday that initial jobless claims fell to 224,000, a decrease of 13,000 for the week ending Dec. 13, suggesting some normalization. The insured unemployment rate held steady at 1.2%, implying that the labor market remained stable while continuing claims reached 1,897,000 during the week ending Dec. 6, increasing 67,000 from the previous week’s revised level. Overall, the employment data indicate that workers are largely retaining their jobs, without significant layoffs. This stable employment situation strengthens the case for investing in a healthcare mutual fund, as steady job retention supports consistent demand for healthcare services.
We have chosen three healthcare mutual funds — Fidelity Select Biotechnology Portfolio (FBIOX - Free Report) , Franklin Biotechnology Discovery Fund (FBDIX - Free Report) and PGIM Jennison Health Sciences (PHLAX - Free Report) — that investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.
Fidelity Select Biotechnology Portfolio fund seeks capital appreciation. FBIOX invests most of its assets in common stocks of companies principally engaged in the research, development, manufacture, and distribution of various biotechnological products, services, and processes and companies that benefit significantly from scientific and technological advances in biotechnology.
Rajiv Kaul has been the lead manager of FBIOX since Oct. 12, 2005. Most of the fund's holdings were in companies like AbbVie Inc. (16.7%), Amgen Inc. (8.2%) and Gilead Sciences, Inc. (8.1%) as of Aug. 31, 2025.
FBIOX's 3-year and 5-year returns are 16.9% and 4.7%, respectively. The annual expense ratio is 0.63%. FBIOX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
Franklin Biotechnology Discovery Fund seeks capital appreciation. FBDIX invests most of its net assets in equity securities of biotechnology companies and discovery research firms.
Evan S. McCulloch has been the lead manager of FBDIX since Sept. 15, 1997. Most of the fund's holdings were in companies like Gilead Sciences, Inc. (7.5%), Vertex Pharmaceuticals Inc (6.6%) and Amgen Inc. (5.8%) as of July 31, 2025.
FBDIX's 3-year and 5-year returns are 22.4% and 7.3%, respectively. The annual expense ratio is 1.01%. FBDIX has a Zacks Mutual Fund Rank #1.
PGIM Jennison Health Sciences fund seeks long-term capital appreciation. PHLAX invests in equity-related securities of U.S. companies within a specific group of industries.
Debra Netschert has been the lead manager of PHLAX since Jan. 28, 2015. Most of the fund’s holdings were in Eli Lilly and Co. (13.1%), Thermo Fisher Scientific Inc. (5.2%) and Vertex Pharmaceuticals Inc. (4.4%)as of Aug. 31, 2025.
PHLAX’s 3-year and 5-year annualized returns are 14.3% and 8.9%, respectively. Its net expense ratio is 1.15%. PHLAX has a Zacks Mutual Fund Rank #2.
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 >>