5 Strong Buy Healthcare Funds to Bet on - Mutual Fund Commentary

When markets are passing through choppy waters, investors often rely on the healthcare sector to safeguard their investments. This is because the demand for healthcare services does not vary with market conditions, making them a safe haven during difficult times. Many pharma companies also generate regular dividends, which go a long way in softening the blow dealt by plummeting share prices. Mutual funds are the perfect choice for investors looking to enter this sector since they possess the advantages of wide diversification and analytical insight.

Below we will share with you 5 top rated health 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 Medical Delivery Portfolio (FSHCX) invests largely in companies that own or are involved in operating hospital and nursing homes, and are related to health care services sector. The fund focuses on acquiring common stocks of both U.S. and non U.S. companies. This healthcare mutual fund is non-diversified and returned 26.3% over the last one year period.

The fund has an expense ratio of 0.82% as compared to category average of 1.39%.

Vanguard Health Care Index Admiral (VHCIX) seeks to provide returns identical to that of the MSCI US Investable Market Index (IMI)/Health Care 25/50 index. The fund invests in almost all or all of the stocks which are included in the index. The index includes domestic health care companies. This healthcare mutual fund is non-diversified and returned 28.3% over the last one year period.

As of July 2014, this fund held 312 issues with 10.14% of its assets invested in Johnson & Johnson.

Fidelity Select Medical Equipment & Systems (FSMEX) invests a lion’s share of its assets in companies that are primarily involved in medical equipment and devices and related technologies sector. The fund invests in both US and non-US companies. This healthcare mutual fund is non-diversified and returned 27.8% over the last one year period.

Edward Yoon is the fund manager and has managed this healthcare mutual fund since 2007.

Fidelity Select Health Care (FSPHX) seeks capital growth over the long run. It invests a majority of its assets in companies whose principal operations include production, design and marketing of health care related products or services. The fund focuses on acquiring common stocks and purchases both domestic and foreign securities depending on factors such as financial strength and economic conditions. This non-diversified fund returned 41.3% over the last one year period.

The fund has an expense ratio of 0.76% as compared to category average of 1.39%.

Fidelity Select Pharmaceuticals (FPHAX) invests heavily in firms all over the globe whose primary operations are related to manufacturing, selling, developing or distributing pharmaceuticals and drugs. The fund invests in the pharma sector taking into consideration the industry position and the financial condition of the issuer. This healthcare mutual fund is non-diversified and returned 33.9% over the last one year period.

As of July 2014, this fund held 89 issues with 8.53% of its assets invested in Actavis PLC

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 in our Mutual Fund Center.

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