3 Top-Ranked Healthcare Mutual Funds to Strengthen Your Portfolio

One of the best ways to safeguard investments is by parking money in the healthcare sector. This is because demand for healthcare services remains relatively stable, regardless of market conditions. Among the sector players, many pharmaceutical companies also pay out regular dividends.

Companies that consistently offer dividends are financially stable and generate a steady cash flow, irrespective of market conditions. Mutual funds are the perfect choice for investors seeking to enter this sector, as they have the advantages of broad diversification and analytical insight.

Below, we share with you three healthcare mutual funds, namely Franklin Strategic Biotechnology Discovery Fund FBDIX, Vanguard Specialized Portfolios Health Care Fund VGHCX and Fidelity Select Health Care FSPHX. Each has earned 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 funds.

Franklin Strategic Biotechnology Discovery Fund invests most of its net assets in equity securitiesof biotechnology companies and discovery research firms. FBDIX advisors may also invest a small portion of its net assets in equity or debt securities of any type of issuer.

Franklin Strategic Biotechnology Discovery Fund has three-year annualized returns of 23.9%. As of the end of October 2025, FBDIX held 76 issues, with 5.6% of its assets invested in Gilead Sciences.

Vanguard Specialized Portfolios Health Care Fund invests the majority of its net assets in common stocks of foreign and domestic companies that are engaged in the development, production, or distribution of products and services related to pharmaceutical and medical supply companies, as well as businesses that operate hospitals and other healthcare facilities. VGHCX advisors may also invest in companies that are engaged in medical, diagnostic, biochemical, and other research and development activities.

Vanguard Specialized Portfolios Health Care Fund has three-year annualized returns of 5.9%. VGHCX has an expense ratio of 0.33%.

Fidelity Select Health Care fund invests most of its net assets in common stocks of foreign and domestic companies that are engaged in the design, manufacture or sale of products or services used for or in connection with healthcare or medicine. FSPHX invests in stocks based on fundamental analysis factors, including the issuer’s financial condition, industry position, as well as market and economic conditions.

Fidelity Select Health Care fund has three-year annualized returns of 5.3%.  Edward Yoon has been the fund manager of FSPHX since October 2008.