Investors who have soured on technology funds may want to move some cash into
health care funds. The group is the best-performing mutual fund category, by a wide margin, over the past three and five years. Through November 2001, according to Morningstar, Inc., health care funds had returned over 15% annually for the past five years, far ahead of the runner-up group, financial services funds, which had returned less than 12% per year.
Among large health care funds, excellent three-year returns have been posted by Franklin Biotechnology Discovery Fund (33% per year), Eaton Vance Worldwide Health Sciences Fund (31%), Fidelity Select Biotechnology (27%), and Vanguard Health Care Fund (20%).
The $17 billion Vanguard fund, by far the category’s largest, has had an extraordinary record since its inception in 1984-a $10,000 investment in 1986 would have grown to more than $165,000 in 2001, among the best 15-year records of all mutual funds. If you’re thinking of buying individual stocks, you might be interested in knowing that the Vanguard fund recently listed Pharmacia, Pfizer, American Home Products, McKesson HBOC, and Abbott Labs as its top holdings.
