"Healthcare is a core holding in our fund portfolios," says fund expert Jim Lowell. In The Fidelity Investor, he adds, "We own a healthy dose of Fidelity Select Health Care (FSPHX)."
"Traditionally, healthcare has served us well as both an anchor to windward and also as a way to generate real returns." Here are some highlights from his latest review of healthcare-related funds.
"My long-standing diagnosis is that healthcare remains a reliable cure for overall market volatility with organic and strategic upside growth potential.
"Of course, heathcare -- representing nearly 16% of our total GDP -- is unlike any other sector in the S&P. It is so diversified and global, so inter-related to technology, manufacturing, and R&D, so depending upon delivering real goods and services for consumer consumption, that it is almost an economy unto itself.
"Since 2000, Fidelity Select Healthcare has delivered a total return of 38.8% vs. a loss of 14.4% for the S&P 500. Up 24.2% year-to-dater, manager Eddie Yoon invests in the gamut of healthcare options: pharmaceuticals, biotech, medical equipment and systems, and HMOs.
"Investors looking for a one-stop healthcare shop should pick this option. The trumped up political crisis that has engendered a rush to 'cure' our healthcare system has done little to dent the fundamental reasons for keeping a core holding in healthcare now -- earnings growth, demographics and innovation.
"There's also a steady global market dose here; foreign stocks make up 13% of the holdings, but the companies that aren't listed as foreign still derive increasingly greater amounts of revenue from the burgeoning global marketplace.
Yoon's top holdings are Covidien, Pfizer, Medco Health, Allergan, Amgen, Illumina and Bard. It's diversification is a good prescription for risk."
