Investors often rely on the healthcare sector to safeguard their investments. This is because demand for healthcare services does not vary so much with market conditions, and investments in the sector provide sufficient protection to the capital invested. Many pharma companies also generate regular dividends. Companies that pay consistent dividends are financially stable and generate consistent cash flows irrespective of market conditions. Mutual funds are 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. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future.
Fidelity Select Medical Equipment & Systems (MUTF:FSMEX) invests a major portion of its assets in companies that are primarily involved in medical equipment and devices and related technologies sector. FSMEX focuses on acquiring common stocks of companies by analyzing factors including financial strength and economic condition. It invests in both U.S. and non-U.S. companies. Fidelity Select Medical Equipment & Systems has a three-year annualized return of 15.9%.
As of December 2016, FSMEX held 59 issues with 20.42% of its assets invested in Medtronic PLC (NYSE:MDT).
Kinetics Medical Adv A (MUTF:KRXAX) seeks long-term capital appreciation. KRXAX invests the majority of its assets in common stocks, convertible securities, warrants, and other equity securities involved in medical research, pharmaceutical and medical technology industries. The fund invests in companies engaged in cancer research and drug development. Kinetics Medical Adv A is non-diversified and has a three-year annualized return of 2.2%.
Bruce Abel is the asset manager and has managed KRXAX since 1999.
Fidelity Select Biotechnology (MUTF:FBIOX) invests the majority of its assets in securities of companies principally engaged in the research, development, manufacture, and distribution of various biotechnological products. The fund invests in domestic and foreign issuers. FBIOX seeks growth of capital. Fidelity Select Biotechnology has a five-year annualized return of 2.3%.
As of December 2016, FBIOX held 236 issues with 6.77% of its assets invested in Alexion Pharmaceuticals Inc (NASDAQ:ALXN).