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 choice for investors looking to enter this sector since they possess the advantages of wide diversification and analytical insight.
Below, we share with you three healthcare mutual funds, namely Fidelity Select Pharmaceuticals FPHAX, Vanguard Health Care Fund VGHCX and Fidelity Select Health Care Services Portfolio FSHCX. 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 Select Pharmaceuticals invests most of its net assets in common stocks of foreign and domestic companies that are engaged in the research, development, manufacture, sale, or distribution of pharmaceuticals and drugs of all types. FPHAX advisors choose to invest in stocks based on fundamental analysis factors like the issuer’s financial condition, industry position, as well as market and economic condition.
Fidelity Select Pharmaceuticals has three-year annualized returns of 6.8%. As of August 2022, FPHAX held 68 issues, with 13.10% of its assets invested in Eli Lilly & Co.
Vanguard Health Care Fund invests the majority of its net assets in common stocks of foreign and domestic companies that are engaged in the development, production, or distribution of products and services related to pharmaceutical and medical supply companies as well as businesses that operate hospitals and other healthcare facilities. VGHCX advisors may also invest in companies that are engaged in medical, diagnostic, biochemical, and other research and development activities.
Vanguard Health Care Fund has three-year annualized returns of 8.4%. VGHCX has an expense ratio of 0.32% compared with the category average of 1.03%.
Fidelity Select Health Care Services Portfolio invests most of its net assets in common stocks of foreign and domestic companies that are engaged in the ownership or management of hospitals, nursing homes, health maintenance organizations, and companies specializing in the delivery of healthcare services. FSHCX invests in stocks based on fundamental analysis factors like the issuer’s financial condition, industry position, as well as market and economic condition.
Fidelity Select Health Care Services Portfolio has three-year annualized returns of 12.8%. Justin Segalini has been one of the fund managers of FSHCX since January 2016.
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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