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Which Healthcare Mutual Fund Should You Buy: FSMEX or JNGLX?

By Zacks Investment ResearchStock MarketsApr 05, 2021 08:19AM ET
www.investing.com/analysis/which-healthcare-mutual-fund-should-you-buy-fsmex-or-jnglx-200571279
Which Healthcare Mutual Fund Should You Buy: FSMEX or JNGLX?
By Zacks Investment Research   |  Apr 05, 2021 08:19AM ET
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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 steady 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.

In such circumstances, investing in healthcare mutual funds seems prudent. However, choosing the right mutual funds for your portfolio can be quite tricky. To that end, let us find out which of the two funds discussed below is better.

Fidelity Select Medical (NYSE:SEM) Technology and Devices Portfolio FSMEX

This fund invests a large portion of its assets in securities of companies engaged in manufacturing and distribution of medical devices and equipment. It also invests in companies enabling drug discovery, and companies providing information technology services primarily to health care providers. The fund invests in both U.S. and non-U.S. stocks.

This Sector-Health product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the three and five-year benchmarks are 24.3% and 24.1%, respectively. To see how this fund performed compared in its category, and other #1 and #2 Ranked Mutual Funds, please click here.

Meanwhile, as of the last filing, Thermo Fisher Scientific (NYSE:TMO) and Danaher Corp (NYSE:DHR) were the top holdings for Fidelity Select Medical Technology and Devices Portfolio.

This product, with a Zacks Mutual Fund Rank #1 (Strong Buy), was incepted in April 1998 and is managed by Fidelity. FSMEX requires no minimal initial investment.

Janus Henderson Global Life Sciences Fund Class D JNGLX

This fund aims for long-term capital growth. It invests the majority of its assets in securities of companies that the fund managers believe have a life science orientation. The fund also invests a minimum of 25% of its total assets in securities of companies from the "life sciences" sector.

This Sector-Health product has a history of positive total returns for over 10 years. Specifically, the fund’s returns are 17.5% over the three-year and 16.6% of the five-year period. To see how this fund performed compared in its category, and other #1 and 2 Ranked Mutual Funds, please click here.

Meanwhile, as of the last filing, Unitedhealth Group Inc and Astrazeneca Plc (LON:AZN) were the top holdings for Janus Henderson Global Life Sciences Fund Class D.

This product with a Zacks Mutual Fund Rank #1 (Strong Buy) was incepted in December 1998 and is managed by Janus Fund. JNGLX requires a minimal initial investment of $2,500.

To Conclude

While both FSMEX and JNGLX are buy-rated funds, upon having a closer look, we find that the former is a clear winner. JNGLX is way more expensive compared to FSMEX (it has a minimum initial investment $2,500 compared to FSMEX’s $0). Further, JNGLX has a 3-year beta of 0.82 compared to FSMEX’s 0.79. Therefore, for better returns at lower risk, one must opt for FSMEX.

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Which Healthcare Mutual Fund Should You Buy: FSMEX or JNGLX?
 

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Which Healthcare Mutual Fund Should You Buy: FSMEX or JNGLX?

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