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 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) and is expected to outperform peers in the future. Investors can click here to see the complete list of healthcare funds, their Zacks Rank and past performance.
T. Rowe Price Health Sciences Fund PRHSX is a non-diversified fund that invests more than 80% of its assets in common stocks of companies engaged in various activities in the field of healthcare, medicine or life sciences. The fund mostly invests in mid- and large-capitalization companies. PRHSX has three-year annualized returns of 18.7%.
As of the end of March 2021, PRHSX held 173 issues with 6.16% of its assets invested in UnitedHealth Group Inc.
Fidelity Select Biotechnology Portfolio FBIOX 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 has returned 15.9% in the past three years.
FBIOX has an expense ratio of 0.72% compared with the category average of 1.03%.
Fidelity Select Medical Technology and Devices Portfolio FSMEX fund aims for capital growth. It invests the majority of 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 has three-year annualized returns of 24.1%.
Edward Yoon is the fund manager of FSMEX since 2007.
To view the Zacks Rank and past performance of all healthcare mutual funds, investors can click here to see the complete list of funds.
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