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5 Strong Buy Healthcare Mutual Funds Set to Outperform - Best of Funds

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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 21.2% over the last one year period.

The fund has an expense ratio of 0.82% as compared to category average of 1.38%.

Fidelity Select Medical Equip & Systems (FSMEX) seeks capital growth. It invests a lion's share of its assets in companies that are primarily involved in medical equipment and devices and related technologies sectors. The fund invests in both US and non-US companies. This healthcare mutual fund is non-diversified and returned 21.5% over the last one year period.

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

Fidelity Select Pharmaceuticals Portfolio (FPHAX) invests heavily in firms all over the globe whose primary operations are related to manufacturing, selling, developing or distributing pharmaceuticals and drugs. Industry position and the financial condition of the issuers are considered for investment decisions. This healthcare mutual fund is non-diversified and returned 23.3% over the last one year period.

As of June 2014, this fund held 89 issues with 6.64% of its assets invested in AbbVie Inc.

Fidelity Select Health Care Portfolio (FSPHX) seeks capital growth over long run. It invests 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. This healthcare mutual fund is non-diversified and returned 33.3% over the last one year period.

The fund has an expense ratio of 0.76% as compared to category average of 1.38%.

Vanguard Health Care Index Admiral (VHCIX) invests in almost all or all of the stocks which are included in the MSCI US Investable Market Index (IMI)/Health Care 25/50 index. It seeks to provide returns identical to that of the index. The index includes domestic health care companies. This healthcare mutual fund is non-diversified and returned 20.4% over the last one year period.

As of June 2014, this fund held 313 issues with 10.55% of its assets invested in Johnson & Johnson.

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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