The health care sector is one of the most desirable avenues for parking investments when markets are headed south and these five health mutual funds are expected to outperform their peers in the future.
The health care sector is one of the most desirable avenues for parking investments when markets are headed south. The demand for such services usually remains unchanged even during an economic downturn and investments in the sector provide sufficient protection to the capital invested. Several pharmaceutical companies also provide regular dividends, which can help mitigate losses from falling share prices. Health care mutual funds provide the perfect avenue for investors looking to invest in this sector.
Below are the five top-rated health mutual funds. Zacks has ranked all as a Strong Buy as these mutual funds are expected these to outperform their peers in the future.
VALIC Company I Health Sciences (VCHSX)
Seeking long-term capital growth, the fund invests the majority of its assets in common stocks of health care products, medicine or life sciences related companies. It focuses mainly on investing in large- and mid-cap companies. Not more than 35% of its assets may be invested foreign securities. The health care mutual fund returned 41.36% over the last one-year period.
The health care mutual fund has an expense ratio of 1.15% compared to a category average of 1.40%.
Putnam Global Health Care A (PHSTX)
The majority of its assets are invested in common stocks issued by domestic and foreign large- and mid-cap companies. These companies are primarily those which operate in the health care sector. The mutual fund is non-diversified and returned 31.11% over the last one-year period.
Kelsey Chen is the fund manager and has managed this health care mutual fund since 2005.
ProFunds UltraSector Health Care (HCPSX)
The fund invests in equity securities and derivatives that, in the opinions of the fund advisors, possess daily return characteristics identical to one and a half times the daily return of the Dow Jones U.S. Health Care Index. The health care mutual fund returned 47.79% over the last one year period.
As of July 2013, this health care mutual fund held 118 issues, with 6.98% of its total assets invested in Johnson & Johnson.
Fidelity Select Health Care (FSPHX)
The majority of its assets are invested in companies whose principal operations include production, design and sales of health care related products or services. The fund focuses on acquiring common stocks and purchases both domestic and foreign securities. The health care mutual fund returned 41.15% over the last one-year period.
The health care mutual fund has an expense ratio of 0.78% compared to a category average of 1.40%.
Franklin Biotechnology Discovery A (FBDIX)
The fund seeks capital growth and has invested the majority of its assets in equity of biotechnology and research companies. A maximum of 20% can also be invested in equity or debt securities of domestic or foreign companies. The health care mutual returned 52.44% over the last one-year period.
Fund manager Evan S. McCulloch and has managed FBDIX since 1997.
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