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The United States has imposed 50% tariff rates on Chinese import products, which triggered a worldwide trade war that continues to disrupt financial markets. The United States faced Chinese retaliatory tariffs reaching 34% on U.S. products while China explored additional trade measures.

Market uncertainty has led to increased volatility, which the Cboe Volatility Index (VIX) demonstrated through its Monday peak at 46.98 since April 2020. Major indexes reflected the instability. The Dow suffered a 349.26-point (0.91%) decline to reach 37,965.60, while the S&P 500 lost 11.83 points (0.23%) to reach 5,062.25, and the Nasdaq increased 15.48 points (0.10%) to 15,603.26.

Healthcare Funds Act as a Hedge Against Market Volatility

Healthcare mutual funds provide stability in the current market instability. Medical products and services maintain consistent demand throughout all market conditions because they show a reduced sensitivity to economic fluctuations. The defensive characteristics of healthcare enable it to achieve steady returns when market stress increases.

We have chosen three healthcare mutual funds — Fidelity Select Pharmaceuticals Port (FPHAX - Free Report) , Janus Henderson Global Life Sciences (JNGLX - Free Report) and Putnam Global Health Care (PHSTX - Free Report) — that investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.

Fidelity Select Pharmaceuticals Port fund seeks capital appreciation. FPHAX invests its assets in companies engaged in the research, development, manufacture, sale, or distribution of pharmaceuticals and drugs of all kinds.

Karim Suwwan de Felipe has been the lead manager of FPHAX since July 1, 2017. Most of the fund’s exposure is in companies such as Eli Lilly and Co (24.7%), Novo Nordisk A/S (15.9%) and AstraZeneca PLC (9.2%) as of Nov. 30, 2024.

FPHAX’s three-year and five-year annualized returns are almost 11.8% and 12.1%, respectively. Its net expense ratio is 0.68%. FPHAX has a Zacks Mutual Fund Rank #1.

Janus Henderson Global Life Sciences fund primarily invests in equity securities issued by companies engaged in life sciences orientation.

Andy Acker has been the lead manager of JNGLX since May. 1, 2007. Most of the fund’s exposure is in companies such as Eli Lilly and Co (9%), UnitedHealth Group Inc (6.6%) and Novo Nordisk A/S (3.7%) as of Dec. 31, 2024.

JNGLX’s three-year and five-year annualized returns are almost 7.8% and 10.8%, respectively. Its net expense ratio is 0.80%. JNGLX has a Zacks Mutual Fund Rank #1.

Putnam Global Health Care Fund invests the majority of its net assets in large and midsize healthcare companies that its advisors believe have favorable investment potential.

Michael Maguire has been the lead manager of PHSTX since Nov. 16, 2016. Most of the fund’s holdings were in Eli Lilly and Co (11.7%), UnitedHealth Group (10.2%) and AbbVie Inc. (6.9%) as of Nov. 30, 2024.

PHSTX’s 3-year and 5-year annualized returns are 7.2% and 11.6%, respectively. Its net expense ratio is 1.05%. PHSTX has a Zacks Mutual Fund Rank #2.

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