Investors often rely on the healthcare sector to safeguard their investments. This is because healthcare services do not see their demand varying much with market conditions and thus offer sufficient protection to the capital invested.
Many pharmaceutical companies also offer regular dividends. Companies that consistently pay out dividends are financially stable and generate stable cash flows, 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 — Fidelity Advisor Health Care Fund Class M FACTX, T. Rowe Price Health Sciences Fund PRHSX and Fidelity Select Health Care Portfolio FSPHX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
Fidelity Advisor Health Care Fund Class M aims for capital growth. FACTX invests the majority of its assets in common stocks of companies that are engaged in the design, manufacture, or sale of products or services used for or in connection with health care or medicine. Fidelity Advisor Health Care Fund Class M invests in both U.S. as well as non-U.S. issuers.
Fidelity Advisor Health Care Fund Class M has three-year annualized returns of 17.7%. Edward Yoon is the fund manager of FACTX since 2008.
T. Rowe Price Health Sciences Fund is non-diversified and invests more than 80% of its assets in common stocks of companies engaged in various activities in healthcare, medicine or life sciences. PRHSX mostly invests in mid- and large-capitalization companies.
T. Rowe Price Health Sciences Fund has three-year annualized returns of 21.8%. PRHSX has an expense ratio of 0.76% compared with the category average of 1.03%.
Fidelity Select Health Care Portfolio is a non-diversified fund that aims for capital appreciation. FSPHX 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.
Fidelity Select Health Care Portfolio has three-year annualized returns of 20.2%. As of the end of September 2021, FSPHX held 131 issues with 8.9% of its assets invested in UnitedHealth Group Inc (NYSE:UNH).
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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