By: Zacks Investment Research
September 15, 2010
When markets are passing through choppy waters, investors often rely on the healthcare sector to safeguard their investments. This is because the demand for healthcare services does not vary with market conditions, making them a safe haven during difficult times. Many pharma companies also generate regular dividends, which go a long way in softening the blow dealt by plummeting share prices. Mutual funds are the perfect choice for investors looking to enter this sector since they possess the advantages of wide diversification and analytical insight.
Below we will share with you 5 top rated health mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all health funds, then click here.
Invesco Health Sciences A (HCRAX) invests the majority of its assets in health sciences companies worldwide. It focuses on purchasing common stocks but may also invest in derivatives. Up to 50% of its assets may be invested in foreign securities, including those issued from emerging markets. The health mutual fund returned 4.88% over the last one year period.
The health mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.65% compared to a category average of 1.97%.
Schwab Health Care (SWHFX) seeks capital appreciation by investing heavily in the healthcare sector. The fund primarily purchase equity securities but may also invest in future contracts. It focuses on investing in domestic firms, but may invest up to 25% of its assets in other countries. The health mutual fund has a ten year annualized return of 4.45%.
Larry Mano is the fund manager and has managed this health mutual fund since 2000.
Vanguard Health Care Index (VHCIX) invests primarily in healthcare stocks and seeks to match the performance of the MSCI U.S. Investable Market Health Care 25/50 index. This index consists of stocks of companies of all sizes from this sector. The health mutual fund returned 5.8% in the last one year period.
As of June 2010, this health mutual fund held 303 issues, with 11.65% of its total assets invested in Johnson & Johnson.
Manning & Napier Life Sciences (EXLSX) seeks capital appreciation by investing heavily in securities of companies from the life sciences sector. Domestic and foreign equity, ADRs and U.S. dollar denominated foreign securities make up the majority of its assets. The health mutual fund returned 16.61% over the last one year and has a five year annualized return of 3.15%.
The health mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.11% compared to a category average of 1.97%.
Putnam Global Health Care A (PHSTX) invests primarily in companies from the health care sector across the globe. It focuses on acquiring common stocks of large and mid-cap companies. The health mutual fund returned 2.09% over the last one year period.
The Fund Manager is Kelsey Chen and she has managed this health mutual fund since 2005.
To view the Zacks Rank and past performance of all health mutual 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/
From Zacks Investment Research published on September 15, 2010