3 Healthcare Mutual Funds That Should Be on Your Radar

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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 a 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, namely Schwab Health Care Fund SWHFX, Fidelity Select Health Care Services Portfolio FSHCX and Fidelity Select Biotechnology Portfolio FBIOX. 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.

Schwab Health Care Fund invests the majority of its net assets in equity securities in the healthcare sector. SWHFX, for the purpose of its investments, concentrates on pharmaceutical and biotechnology companies, healthcare facilities operations, medical product manufacturers and suppliers, medical providers and medical services firms.

Schwab Health Care Fund has three-year annualized returns of 11.2%. As of January 2022, SWHFX held 87 issues, with 7.8% of its assets invested in Johnson & Johnson.

Fidelity Select Health Care Services Portfolio seeks to invest a sizeable amount of its net assets in common stocks of domestic and foreign issuers primarily engaged in the ownership or management of hospitals, nursing homes, health maintenance organizations, and other companies specializing in the delivery of healthcare services. FSHCX’s investments are mostly based on a fundamental analysis of companies and their market position with respect to broader economic conditions.

Fidelity Select Health Care Portfolio has three-year annualized returns of 16.9%. FSHCX has an expense ratio of 0.71% compared with the category average of 1.03%.

Fidelity Select Biotechnology Portfolio seeks to invest the majority of its net assets in common stocks of domestic and foreign issuers primarily engaged in research, development, manufacture, and distribution of various biotechnological products, services, and processes and companies that benefit significantly from scientific and technological advances in biotechnology. FBIOX’s investments are mostly based on a fundamental analysis of companies and their market position with respect to the broader economic conditions.

Fidelity Select Biotechnology Portfolio has three-year annualized returns of 1.4%. Rajiv Kaul has been the fund manager of FBIOX since 2005.

To view the Zacks Rank and the past performance of all Healthcare mutual funds, investors can click here to see the complete list of healthcare mutual funds.

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