Top 3 Healthcare Mutual Funds to Strengthen Your Portfolio

Investors often rely on the healthcare sector to safeguard their investments. This is because healthcare services do not see their demand varying much with market conditions and thus offer sufficient protection to the capital invested.

Many pharmaceutical companies also offer regular dividends. Companies that consistently pay out dividends are financially stable and generate stable 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.

Below we share with you three top-ranked healthcare mutual funds — Fidelity Select Medical Technology and Devices Portfolio FSMEX, Fidelity Select Biotechnology Portfolio FBIOX and T. Rowe Price Health Sciences Fund PRHSX. Each has 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 healthcare mutual funds.

Fidelity Select Medical Technology and Devices Portfolio fund aims for capital growth. FSMEX invests the majority of its assets in companies engaged in activities such as research, manufacturing, supply and sale of medical equipment and related technologies. FSMEX invests in common stocks and in U.S. and non-U.S. companies.

Fidelity Select Medical Technology and Devices Portfolio has three-year annualized returns of 28%. As of the end of December 2021, FSMEX held 77 issues with 14.19% of its assets invested in Thermo Fisher Scientific Inc.

Fidelity Select Biotechnology Portfolio fund seeks high capital growth. FBIOX invests most of its assets in securities of companies principally engaged in the research, development, manufacture, and distribution of various biotechnological products, services, and processes. FBIOX invests in common stocks and in U.S. and non-U.S. companies.

Fidelity Select Biotechnology Portfolio has three-year annualized returns of 18.1%. FBIOX has an expense ratio of 0.70% compared with the category average of 1.03%.

T. Rowe Price Health Sciences Fund is a non-diversified fund that aims for capital appreciation. PRHSX invests in the common stocks of companies engaged in the research, development, production, or distribution of products or services related to health care, medicine, or the life sciences.

T. Rowe Price Health Sciences Fund has three-year annualized returns of 23.9%. Ziad Bakri has been one of the fund managers of PRHSX since 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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