When markets are headed south, the healthcare sector could become a viable option for parking investments. This is because the demand for health services remains largely unaffected by the state of the economy. In addition, several pharmaceutical companies pay out a dividend regularly, which has a healing effect on their share prices. With the advantages of professional management and a disciplined approach, healthcare mutual funds are the perfect choice for investors looking to foray into this sector.
Below we will share with you 5 top rated healthcare funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all health funds, then click here.
Franklin Biotechnology Discovery A (FBDIX) seeks long-term capital growth. It invests the majority of its assets in biotechnology and discovery research companies. It may also invest up to 20% of its assets in debt and equities worldwide. The healthcare fund returned 12.62% over the last one year period.
The Fund Manager is Evan S. McCulloch and he has managed this healthcare fund since 1997.
ICON Healthcare (ICHCX) invests at least 80% of its assets in healthcare companies which are traded in U.S. markets. It invests in common and preferred stocks of companies with a wide range of market capitalizations. It is a no load fund and is non-diversified.
The healthcare fund returned 22.85% in 2009 and has a ten year annualized return of 5.17%.
Manning & Napier Life Sciences (EXLSX) seeks capital appreciation by investing the heavily in the life sciences sector. Domestic and foreign equity, ADRs and dollar denominated foreign securities make up the majority of its assets. The healthcare fund has a five year annualized return of 6.63%.
This healthcare fund has a minimum initial investment of $2,000 and an expense ratio of 1.12% compared to a category average of 1.91%.
Rydex Biotechnology (RYOIX) invests substantially in equity securities and derivatives issued by domestic biotechnology companies. It is non-diversified and seeks long-term capital growth. The healthcare fund returned 25.06% in 2009 has a five year annualized return of 6.02%.
Michael P. Byrum is the fund manager and he has managed this healthcare fund since 1998.
Fidelity Select Medical Equipment & Systems (FSMEX) seeks capital growth. It invests primarily in companies whose principal operations are related to medical equipment, devices and related technologies. The healthcare fund has a ten year annualized return of 9.71%.
As of January 2010, this healthcare fund held 60 issues, with 12.81% of its total assets invested in Covidien, Ltd.
To view the Zacks Rank and past performance of all health funds, then click here.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds/mutualfund/.
