5 Sizzling Health Care Funds to Consider Now

Unless you have been sitting on the sidelines – or heaven forbid, invested in a bear-market fund – chances are your portfolio made good money in the past year.

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Unless you have been sitting on the sidelines – or heaven forbid, invested in a bear-market fund – chances are your portfolio made good money in the past year. But even in a profitable year there are winners, and then there are big winners. Health care stocks have been on a tear – funds that focus on the sector returned a stunning 28.32% in the past year, making it the second-best performing sector over that period (behind technology).

Why such juicy returns? Ziad Bakri, manager of T. Rowe Price Health Sciences (PRHSX (opens in new tab)), says the stocks have, in part, been breathing a sigh of relief as political fears have lifted. In 2016, health care stocks struggled as candidates from both major political parties discussed imposing new regulations on drug prices. That talk fizzled in 2017, however, as did efforts to repeal the Affordable Care Act.

Another driver, Bakri says, has been the breathtaking pace of recent innovations. He notes that 46 new therapies received approval in 2017 from the U.S. Food and Drug Administration. “More important than just the number of new drug approvals is the fact that many are truly innovative and can be transformative for patient care,” he says.

We’ve profiled the five top-performing no-load mutual funds that invest in health care stocks, as measured by one-year returns. If the health care sector can keep riding its current winning streak, these relatively high-momentum funds should continue to shine.

Data is as of Jan. 19, 2018, unless otherwise noted. Click on ticker-symbol links in each slide for current share prices and more.

Elizabeth Leary
Contributing Editor, Kiplinger's Personal Finance
Elizabeth Leary (née Ody) first joined Kiplinger in 2006 as a reporter, and has held various positions on staff and as a contributor in the years since. Her writing has also appeared in Barron's, BloombergBusinessweek, The Washington Post and other outlets.