The healthcare 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 we share with you 4 top-ranked healthcare mutual funds . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all healthcare mutual funds, investors can click here to see the complete list of healthcare funds .
Fidelity Select Medical Equipment & Systems (FSMEX - MF report) invests a major portion of its assets in companies that are primarily involved in medical equipment and devices and related technologies sector. FSMEX focuses on acquiring common stocks of companies by analyzing factors including financial strength and economic condition. FSMEX invests in both U.S. and non-U.S. companies. The Fidelity Select Medical Equipment & Systems fund has a three-year annualized return of 17.6%.
As of December 2015, FSMEX held 54 issues with 23.67% of its assets invested in Medtronic PLC.
Hartford Healthcare HLS IB (HBGHX - MF report) seeks long-term growth of capital. HBGHX invests a large share of its assets in securities of both U.S. and non-U.S. health care companies. HBGHX invests in securities of companies of any size located in a wide range of countries. HBGHX is expected to maintain a cash balance of not more than 10% of its assets. The Hartford Healthcare HLS IB fund has a three-year annualized return of 19.8%.
HBGHX has an expense ratio of 1.13% as compared to the category average of 1.36%.
Vanguard Health Care Index Admiral (VHCIX - MF report) 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. VHCIX seeks to provide returns identical to that of the index. The index includes domestic health care companies. TheVanguard Health Care Index Admiral fund is non-diversified and has a three-year annualized return of 16.7%.
As of December 2015, VHCIX held 348 issues with 8.77% of its assets invested in Johnson & Johnson.
Delaware Healthcare A (DLHAX - MF report) seeks long-term capital growth. DLHAX invests a large portion of its assets in the equity securities of health care companies. These companies produce and distribute products that are required in medical industries. The Delaware Healthcare A fund is non-diversified and has a three-year annualized return of 17.5%.
Liu-Er Chen is the lead manager and has managed DLHAX since 2007.
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