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Mutual Funds

A Vanguard Fund Plays Defense With Health Stocks

It may be cold comfort for beleaguered investors, but Vanguard Primecap Core's performance is in the top 3% of large-company growth funds over the past year, according to Morningstar. The fund's managers have placed a big bet on a classic defensive sector, with 28% of assets in health-care stocks, including the six top holdings (among them European drug giants Novartis, GlaxoSmithKline and Roche).

The managers say share prices don't reflect the promising drugs and devices now in development (Medtronic is another top-six holding). They also like the sturdy balance sheets of health-care companies and the potential for growth despite the recession.

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