The beginning of this month marked an important period for investors eyeing the U.S. healthcare sector. Three biotech companies went public, raising a whopping $320 million and listing shares on the Nasdaq.

Viela Bio raised the highest amount with $150 million in its IPO by issuing 7.9 million shares at $19 each. Further, Frequency Therapeutics and Aprea Therapeutics raised $84 million and $85 million, respectively. These companies braved extreme stock market volatility and went public. Moreover, all these companies have performed well since listing their shares.

Moreover, there has been a rise in sociopolitical campaigns to raise awareness regarding breast cancer and related diseases across the United States. Such events shape up the future of biotech industry. This is because new companies come up in order to tackle problems related to old or existing drugs, which potentially leads to a bump in biotech stocks. Companies making cancer drugs or therapeutics related to rare diseases seize such opportunities and gain big.

Historically, space has been risky from investors’ standpoint. This is because they bet on the assumption that products in the pipeline would turn out to be highly successful. But any failure in a key clinical trial can make things really unpleasant for investors.

Nonetheless, a higher number of mergers and acquisitions (M&A) and an increased number of FDA approvals have been pivotal in shaping up the fortunes of the biotech sector. It is expected that the fourth quarter might witness a surge in biotech stocks. Let’s look at some of the mutual funds from the space, expected to perform well in the current quarter.

4 Best Funds to Buy in Q4

Given such bullish circumstances, we have highlighted four biotech mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) and are poised to gain from such factors. Moreover, these funds have encouraging year-to-date (YTD) returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform their peers in the future.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds.

Fidelity Select Biotechnology Portfolio (FBIOX - Free Report) fund invests the majority of its net assets in common stocks of companies mostly engaged in the research, development and distribution of biotechnological products. The fund primarily seeks capital growth. The non-diversified fund invests in U.S. and non-U.S. companies alike.

This Zacks sector – Health product has a history of positive total returns for more than 10 years. Specifically, the fund's return over the YTD benchmark is 7.4%.

FBIOX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.72%, which is below the category average of 1.26%.

T. Rowe Price Health Sciences Fund (PRHSX - Free Report) invests a minimum of 80% of its assets in common stocks of companies mostly engaged in research, production, and distribution of products and services in the healthcare-related industry. The non-diversified fund mostly invests in mid- and large-capitalization companies.

This Zacks sector – Health product has a history of positive total returns for more than 10 years. Specifically, the fund's return over the YTD benchmark is 8.5%.

PRHSX carries a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.77%, which is below the category average of 1.26%.

Vanguard Health Care Fund Investor Shares (VGHCX - Free Report) seeks long-term capital growth by investing in securities of companies that are engaged in the production and distribution of products and services from the healthcare industry. The fund may invest about half of its assets in non-U.S. stocks.

This Zacks sector – Health product has a history of positive total returns for more than 10 years. Specifically, the fund's return over the YTD benchmark is 5.2%.

VGHCX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.34%, which is below the category average of 1.26%.

Invesco Health Care Fund Class Y (GGHYX - Free Report) aims for long-term capital appreciation. The fund invests the majority of its assets in securities of companies that are engaged in operations in healthcare-related industries. The fund mostly invests in equity securities, depositary receipts, and securities convertible into equity securities.

This Zacks sector – Health product has a history of positive total returns for more than 10 years. Specifically, the fund's return over the YTD benchmark is 10.5%.

GGHYX holds a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 0.85%, which is below the category average of 1.26%.