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One of the best ways to safeguard investments is by parking money in the healthcare sector. This is because demand for healthcare services does not change with market conditions. Many pharmaceutical companies also pay out regular dividends.

Companies that consistently offer dividends are financially stable and generate a steady cash flow, irrespective of market conditions. Mutual funds are the perfect choices for investors looking to enter this sector since they possess the advantages of wide diversification and analytical insight.

Below we share with you three top-ranked healthcare mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (Buy) and is expected to outperform its peers in the future.

Fidelity Select Health Care Portfolio (FSPHX - Free Report) is a non-diversified fund that aims for capital appreciation. The fund invests the majority of its assets in common stocks of companies engaged in designing, manufacturing, or sale of products or services related to healthcare or medicine. FSPHX carries a Zacks Mutual Fund Rank of #1 and has three-year annualized returns of 14.2%.

As of the end of August 2021, FSPHX held 132 issues with 9% of its assets invested in UnitedHealth Group Inc.

Fidelity Select Biotechnology Portfolio (FBIOX - Free Report) fund invests the majority of assets in the securities of companies that are mostly engaged in the research, development, manufacture and distribution of biotechnological products and services. The fund also invests in companies that gain considerably from scientific and technological advances in biotechnology. The non-diversified fund invests in U.S. and non-U.S. issuers alike. The fund sports a Zacks Mutual Fund Rank of #2 and has returned 11.7% in the past three years.

FBIOX has an expense ratio of 0.70% compared with the category average of 1.03%.

Fidelity Select Medical Technology and Devices Portfolio (FSMEX - Free Report) fund aims for capital growth. It invests the majority of its assets in companies that are engaged in activities such as research, manufacturing, supply and sale of medical equipment and related technologies. The non-diversified fund invests in common stocks and in U.S. and non-U.S. issuers. FSMEX carries a Zacks Mutual Fund Rank of #1 and has three-year annualized returns of 33.1%.