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3 Healthcare Funds to Safeguard Your Portfolio as Inflation Rises
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Inflation rose further in September as consumer goods prices rose at a faster pace. Rising oil prices amid ongoing tensions in the Middle East have driven up the cost of goods and services.
The latest inflation data could give the Federal Reserve further grounds to raise interest rates as early as this month. Persistent price pressures have also heightened concerns about a potential economic slowdown.
Against this backdrop, it would be wise to consider investing in defensive, low-risk healthcare funds. Three such funds are Fidelity Select Health Care (FSPHX - Free Report) , Vanguard Health Care Fund (VGHCX - Free Report) and Janus Henderson Global Life Sciences D (JNGLX - Free Report) .
Inflation Accelerates Further
The consumer price index (CPI) increased 0.6% month over month in September, following a 0.4% rise in August, according to data released by the Commerce Department on Wednesday. The monthly increase matched analysts’ expectations.
On an annual basis, CPI climbed 3.7% in September from 3.4% in August. Core CPI, which excludes the more volatile food and energy categories, rose 0.3% month over month, surpassing the consensus estimate of a 0.2% increase.
Year over year, core CPI advanced 2.6% in September compared with 2.4% in the previous month.
Higher fuel costs were a major contributor to the September inflation increase, with gasoline prices surging 9.1%. Diesel prices advanced 11.9% during the month and were 60.9% higher than a year earlier. Grocery prices also increased 1.8% year over year in September.
The rise in core inflation was primarily driven by a 0.4% increase in shelter costs.
Escalating tensions in the Middle East have pushed energy prices higher, adding to expenses across goods, services, and transportation. Airline fares rose 1.2% in September. Inflation has consequently accelerated over the past six months after easing considerably last year.
Price growth remains well above the Federal Reserve’s 2% target. The central bank raised interest rates by 25 basis points at its September policy meeting, while financial markets had anticipated another quarter-point increase in December.
However, the latest CPI figures could strengthen the case for an earlier rate hike this month. Higher interest rates would increase borrowing costs for households and businesses, potentially weighing on consumer spending.
3 Healthcare Funds to Buy
We have selected three healthcare funds that are safe bets during this time of market volatility. Moreover, these funds have encouraging three and five-year returns. The minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors in identifying potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Health Care fund seeks capital appreciation. FSPHX normally invests 80% of its assets in common stocks of companies principally engaged in the design, manufacture, or sale of products or services used for or in connection with healthcare or medicine.
FSPHX’s 3-year and 5-year annualized returns are 13.3% and 4.8%, respectively. Fidelity Select Health Care fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.62%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Vanguard Health Care Fund invests the majority of its net assets in the common stocks of foreign and domestic companies. These companies are engaged in the development, production, or distribution of products and services related to pharmaceutical and medical supply companies, as well as businesses that operate hospitals and other healthcare facilities.
VGHCX’s 3-year and 5-year annualized returns are 8.7% and 5.4%, respectively. Vanguard Health Care Fund has a Zacks Mutual Fund Rank #2 (Buy) and an annual expense ratio of 0.33%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Janus Henderson Global Life Sciences D fund primarily invests in equity securities issued by companies engaged in life sciences orientation.
JNGLX’s 3-year and 5-year annualized returns are 14.9% and 8.5%, respectively. Janus Henderson Global Life Sciences D fund has a Zacks Mutual Fund Rank #1 (Strong Buy) and an annual expense ratio of 0.79%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
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3 Healthcare Funds to Safeguard Your Portfolio as Inflation Rises
Inflation rose further in September as consumer goods prices rose at a faster pace. Rising oil prices amid ongoing tensions in the Middle East have driven up the cost of goods and services.
The latest inflation data could give the Federal Reserve further grounds to raise interest rates as early as this month. Persistent price pressures have also heightened concerns about a potential economic slowdown.
Against this backdrop, it would be wise to consider investing in defensive, low-risk healthcare funds. Three such funds are Fidelity Select Health Care (FSPHX - Free Report) , Vanguard Health Care Fund (VGHCX - Free Report) and Janus Henderson Global Life Sciences D (JNGLX - Free Report) .
Inflation Accelerates Further
The consumer price index (CPI) increased 0.6% month over month in September, following a 0.4% rise in August, according to data released by the Commerce Department on Wednesday. The monthly increase matched analysts’ expectations.
On an annual basis, CPI climbed 3.7% in September from 3.4% in August. Core CPI, which excludes the more volatile food and energy categories, rose 0.3% month over month, surpassing the consensus estimate of a 0.2% increase.
Year over year, core CPI advanced 2.6% in September compared with 2.4% in the previous month.
Higher fuel costs were a major contributor to the September inflation increase, with gasoline prices surging 9.1%. Diesel prices advanced 11.9% during the month and were 60.9% higher than a year earlier. Grocery prices also increased 1.8% year over year in September.
The rise in core inflation was primarily driven by a 0.4% increase in shelter costs.
Escalating tensions in the Middle East have pushed energy prices higher, adding to expenses across goods, services, and transportation. Airline fares rose 1.2% in September. Inflation has consequently accelerated over the past six months after easing considerably last year.
Price growth remains well above the Federal Reserve’s 2% target. The central bank raised interest rates by 25 basis points at its September policy meeting, while financial markets had anticipated another quarter-point increase in December.
However, the latest CPI figures could strengthen the case for an earlier rate hike this month. Higher interest rates would increase borrowing costs for households and businesses, potentially weighing on consumer spending.
3 Healthcare Funds to Buy
We have selected three healthcare funds that are safe bets during this time of market volatility. Moreover, these funds have encouraging three and five-year returns. The minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors in identifying potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Health Care fund seeks capital appreciation. FSPHX normally invests 80% of its assets in common stocks of companies principally engaged in the design, manufacture, or sale of products or services used for or in connection with healthcare or medicine.
FSPHX’s 3-year and 5-year annualized returns are 13.3% and 4.8%, respectively. Fidelity Select Health Care fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.62%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Vanguard Health Care Fund invests the majority of its net assets in the common stocks of foreign and domestic companies. These companies are engaged in the development, production, or distribution of products and services related to pharmaceutical and medical supply companies, as well as businesses that operate hospitals and other healthcare facilities.
VGHCX’s 3-year and 5-year annualized returns are 8.7% and 5.4%, respectively. Vanguard Health Care Fund has a Zacks Mutual Fund Rank #2 (Buy) and an annual expense ratio of 0.33%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Janus Henderson Global Life Sciences D fund primarily invests in equity securities issued by companies engaged in life sciences orientation.
JNGLX’s 3-year and 5-year annualized returns are 14.9% and 8.5%, respectively. Janus Henderson Global Life Sciences D fund has a Zacks Mutual Fund Rank #1 (Strong Buy) and an annual expense ratio of 0.79%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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 >>