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Buy 3 Healthcare Mutual Funds to Consider Amid Market Volatility
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The U.S. labor market indicates that it is slowing. This release of the ADP national employment report for July showed that private employers added only 44,000 jobs in the month. This was a decline from the revised 95,000 jobs added in June.
The increase in volatility in the oil market due to Iran tensions is heightening concerns of higher energy prices, which could keep inflation at or near elevated levels and put the next Federal Reserve policy decision in question. The CME FedWatch Tool currently puts the probability of no change in the federal funds rate at 3.75% to 4.00% for the September FOMC meeting at 54.9%.
With market uncertainty regarding the economy, there are certain defensive sectors in the market that can perform better than others. The healthcare sector is one such group because of the constant demand for products and services. The healthcare sector has a low beta, or less movement in the stock market as a whole. There are also four sub-industries in the sector, including pharmaceuticals, biotechnology, medical devices, and healthcare services. These areas are constantly undergoing innovations, which create long-term gains for the sector as a whole.
We have picked three healthcare mutual funds — Franklin Biotechnology Discovery Fund (FBDIX - Free Report) , Fidelity Advisor Biotechnology Fund (FBTIX - Free Report) and PGIM Jennison Health Sciences (PHLAX - Free Report) — which investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #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.
Franklin Biotechnology Discovery Fund invests most of its net assets in securities of biotechnology companies and discovery research firms, primarily equities.
Evan S. McCulloch has been the lead manager of FBDIX since Sept. 15, 1997. Most of the fund’s holdings were in companies, such as Gilead Sciences, Inc. (6.2%), Amgen Inc. (4.8%) and Vertex Pharmaceuticals Inc (4.7%) as of Jan. 31, 2026.
FBDIX’s 3-year and 5-year annualized returns are 29.7% and 11.1%, respectively. Its net expense ratio is 1.05%. FBDIX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 (Strong Buy) and 2 Ranked Mutual Funds, please click here.
Fidelity Advisor Biotechnology Fund invests its assets in securities of companies principally engaged in the research, development, manufacture, and distribution of biotechnological products, services, and processes, and in companies that benefit significantly from scientific and technological advances in biotechnology.
Eirene Kontopoulos has been the lead manager of FBTIX since July 15, 2018. Most of the fund’s holdings were in companies such as AbbVie Inc. (16.6%), Gilead Sciences, Inc. (6.6%) and Alnylam Pharmaceuticals, Inc. (5%) as of Jan. 31, 2026.
FBTIX’s 3-year and 5-year annualized returns are 26.2% and 12.6%, respectively. Its net expense ratio is 0.70%. FBTIX has a Zacks Mutual Fund Rank #1.
PGIM Jennison Health Sciences fund seeks investments whose prices will increase over time. PHLAX invests its investable assets (net assets plus any borrowings for investment purposes) in equity and equity-related securities of health sciences companies, including pharmaceutical and biotechnology companies, medical device manufacturers, and healthcare service providers.
Debra Netschert has been the lead manager of PHLAX since Jan. 28, 2015. Most of the fund’s holdings were in companies, such as Eli Lilly and Co (16.8%), Merck & Co., Inc. (6%) and Gilead Sciences, Inc. (4.4%) as of Feb. 28, 2026.
PHLAX’s 3-year and 5-year annualized returns are 13.6% and 6.4%, respectively. Its net expense ratio is 1.15%. PHLAX has a Zacks Mutual Fund Rank #1.
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Buy 3 Healthcare Mutual Funds to Consider Amid Market Volatility
The U.S. labor market indicates that it is slowing. This release of the ADP national employment report for July showed that private employers added only 44,000 jobs in the month. This was a decline from the revised 95,000 jobs added in June.
The increase in volatility in the oil market due to Iran tensions is heightening concerns of higher energy prices, which could keep inflation at or near elevated levels and put the next Federal Reserve policy decision in question. The CME FedWatch Tool currently puts the probability of no change in the federal funds rate at 3.75% to 4.00% for the September FOMC meeting at 54.9%.
With market uncertainty regarding the economy, there are certain defensive sectors in the market that can perform better than others. The healthcare sector is one such group because of the constant demand for products and services. The healthcare sector has a low beta, or less movement in the stock market as a whole. There are also four sub-industries in the sector, including pharmaceuticals, biotechnology, medical devices, and healthcare services. These areas are constantly undergoing innovations, which create long-term gains for the sector as a whole.
We have picked three healthcare mutual funds — Franklin Biotechnology Discovery Fund (FBDIX - Free Report) , Fidelity Advisor Biotechnology Fund (FBTIX - Free Report) and PGIM Jennison Health Sciences (PHLAX - Free Report) — which investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #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.
Franklin Biotechnology Discovery Fund invests most of its net assets in securities of biotechnology companies and discovery research firms, primarily equities.
Evan S. McCulloch has been the lead manager of FBDIX since Sept. 15, 1997. Most of the fund’s holdings were in companies, such as Gilead Sciences, Inc. (6.2%), Amgen Inc. (4.8%) and Vertex Pharmaceuticals Inc (4.7%) as of Jan. 31, 2026.
FBDIX’s 3-year and 5-year annualized returns are 29.7% and 11.1%, respectively. Its net expense ratio is 1.05%. FBDIX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 (Strong Buy) and 2 Ranked Mutual Funds, please click here.
Fidelity Advisor Biotechnology Fund invests its assets in securities of companies principally engaged in the research, development, manufacture, and distribution of biotechnological products, services, and processes, and in companies that benefit significantly from scientific and technological advances in biotechnology.
Eirene Kontopoulos has been the lead manager of FBTIX since July 15, 2018. Most of the fund’s holdings were in companies such as AbbVie Inc. (16.6%), Gilead Sciences, Inc. (6.6%) and Alnylam Pharmaceuticals, Inc. (5%) as of Jan. 31, 2026.
FBTIX’s 3-year and 5-year annualized returns are 26.2% and 12.6%, respectively. Its net expense ratio is 0.70%. FBTIX has a Zacks Mutual Fund Rank #1.
PGIM Jennison Health Sciences fund seeks investments whose prices will increase over time. PHLAX invests its investable assets (net assets plus any borrowings for investment purposes) in equity and equity-related securities of health sciences companies, including pharmaceutical and biotechnology companies, medical device manufacturers, and healthcare service providers.
Debra Netschert has been the lead manager of PHLAX since Jan. 28, 2015. Most of the fund’s holdings were in companies, such as Eli Lilly and Co (16.8%), Merck & Co., Inc. (6%) and Gilead Sciences, Inc. (4.4%) as of Feb. 28, 2026.
PHLAX’s 3-year and 5-year annualized returns are 13.6% and 6.4%, respectively. Its net expense ratio is 1.15%. PHLAX has a Zacks Mutual Fund Rank #1.
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 >>