Top 5 Best Performing Healthcare Mutual Funds (July 2011)

When markets are facing a downturn, investors often depend on the healthcare sector to safeguard their investments. Since the demand for healthcare and related services does not fluctuate with changing market conditions, such investments are a safe haven during tough times. Many pharmaceutical companies also pay out regular dividends, which soften the blow investors receive from falling share prices. Mutual funds are the perfect choice for investors looking to enter this sector since they posses the advantages of analytical insight gleaned form in depth research which is needed to keep abreast of the latest advancements in this domain.

Below we will share with you the 5 best performing healthcare mutual funds year to date.

Mutual Fund Zacks Rank Total Return YTD
ProFunds Healthcare Ultrasector #1 Strong Buy 22.3%
Fidelity Select Biotechnology #4 Sell 21.4%
Fidelity Select Medical Delivery #1 Strong Buy 21.4%
ProFunds Biotechnology Ultra Sector #4 Sell 21.3%
T. Rowe Price Health Sciences #1 Strong Buy 21.0%

ProFunds HealthCare UltraSector (HCPSX) primarily invests in equity securities and derivatives whose daily returns are identical to 150% of the daily return of the Dow Jones U.S. Health Care Index. It is non-diversified and the balance of its assets are utilised to purchase money market securities. It is a no load fund.

The healthcare mutual fund has a three year annualized return of 5%.

Fidelity Select Biotechnology (FBIOX) seeks capital growth. It invests at least 80% of its assets in companies seeking to benefit from advances in the biotechnological sector. It may also purchases securities issued by foreign companies. The healthcare mutual fund has a ten year annualized return of 2.57%.

The healthcare mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.86% compared to a category average of 1.72%.

Fidelity Select Medical Delivery (FSHCX) invests in firms engaged in the delivery of health care services. Such companies include those which manage hospitals, nursing homes health maintenance organisations and other firms focussing on delivery of healthcare services. It is non-diversified and may also purchase foreign securities. The healthcare mutual fund returned 37.91% over the last one year period.

As of May 2011, this healthcare mutual fund held 59 issues, with 10.78% of its total assets invested in WellPoint, Inc..

ProFunds Biotechnology Ultra Sector (BIPSX) seeks daily returns which are 150% of the daily performance of the Dow Jones U.S. Biotechnology Index . The fund primarily invests in equity securities and derivatives and the balance of its assets are utilised to purchase money market securities. The healthcare mutual fund has a five year annualized return of 4.41%.

Todd Johnson is the fund manager and he has managed this healthcare mutual fund since 2008.

T. Rowe Price Health Sciences (PRHSX) invests heavily in common stocks of companies whose primary operations are related to healthcare products medicine or life sciences. The fund focuses on purchasing securities issued by large and mid-cap companies, though it may invest in smaller firms. The healthcare mutual fund returned 20.07% over the last one year period.

The healthcare mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.84% compared to a category average of 1.72%.

To view the Zacks Rank and past performance of all healthcare 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.

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