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5 Healthcare Mutual Funds To Strengthen Your Portfolio – Mutual Fund Commentary

When markets are passing through choppy waters, investors often rely on the healthcare sector to safeguard their investments. This is because the demand for healthcare services does not vary with market conditions, making them a safe haven during difficult times. Many pharma companies also generate regular dividends, which go a long way in softening the blow dealt by plummeting share prices. Mutual funds are the perfect choice for investors looking to enter this sector since they possess the advantages of wide diversification and analytical insight. Below we will share with you 5 potential health mutual funds . Each has earned either a Zacks #1 Rank (Strong Buy) or Zacks #2 Rank (Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all health funds, investors can click here to see the complete list of funds . Putnam Global Health Care A (MUTF: PHSTX ) seeks capital growth. The fund primarily invests in growth, value stocks or either type of stocks of mid and large cap healthcare companies. The companies may be ones that provide health care related services, or those who develop or manufacture pharmaceuticals and biotechnology products. The non-diversified healthcare mutual fund returned 31.9% over the last one year. The fund has an expense ratio of 1.14% as compared to category average of 1.43%. Fidelity Select Medical Delivery Portfolio (MUTF: FSHCX ) invests largely in companies that own or are involved in operating hospital and nursing homes, and are related to health care services sector. The fund focuses on acquiring common stocks of both U.S. and non U.S. companies. The non-diversified healthcare fund returned 26.9% over the last one year period. Steven Bullock is the fund manager and has managed this healthcare mutual fund since 2012. T. Rowe Price Health Sciences (MUTF: PRHSX ) seeks capital growth over the long run. It invests the majority of its assets in common stocks of companies whose primary operations are related to health sciences. The fund focuses on investing in large and mid-cap firms. It may also invest in non U.S. securities. The healthcare mutual fund returned 35.8% over the last one year period. As of September 2014, this fund held 155 issues with 5.57% of its assets invested in Gilead Sciences Inc. Prudential Jennison Health Sciences A (MUTF: PHLAX ) utilizes the bulk of its assets to purchase equity securities of companies in the health sciences sector. It invests in companies all over the globe. It may also invest in IPOs. The fund may invest over 5% of assets in a single issuer. The non-diversified healthcare fund returned 40.4% over the last one year period. The fund has an expense ratio of 1.18% as compared to category average of 1.43%. Franklin Biotechnology Discovery A (MUTF: FBDIX ) seeks long-term capital growth. The fund invests a lion’s share of its assets in companies involved in biotechnology and discovery research activities. Additionally, the company may invest a maximum of 20% of its assets in securities issued by foreign or domestic companies. The non-diversified healthcare fund returned 37.9% over the last one year period. As of September 2014, this fund held 112 issues with 9.29% of its assets invested in Celgene Corporation.

Investing Tips, Particularly For Those Without The Time For Detailed Stock Picking

Only long-term funds (those with a 5+ year time horizon) should be invested in equities. For long-term investments, the stock market is the best ‘wealth creation machine’. Dollar cost averaging into a low-cost, diversified global equities vehicle arguably the best approach. Given my long-held passion for investing, I am often asked by friends and acquaintances for stock tips specifically or investment advice in general. The first thing I say in response is that one should never put in the stock market even one cent one might need within the next five years. Equity investing is a long-term proposition. Having said that, I immediately move on to advocate the stock market as the best wealth creating “machine” known to humankind. I am passionate about investing in the equity market with a bottom-up, long-term orientation. However, most people don’t have the time or passion for the extensive security selection work required for diversified bottom-up equity investing. This does not mean that they cannot outperform most professional fund managers over the long haul. For people who have a long-term (5 years or more) investment horizon yet don’t have the willingness or ability required for diversified stock picking and portfolio management, I advocate using a low-cost diversified equity ETF (exchange traded fund). ACWI is currently my favorite for the long term given that it gives investors, no matter how small, the ability to purchase a diversified global equity portfolio very efficiently. Given that most professional fund managers do not manage to beat the broad global benchmark over the long haul, particularly net of fees, simply buying ACWI (that is actually the global ETF’s ticker) gives even the small investor a good shot at outperforming most managers long term. Just over two years ago, I came up with the following thought. If your goal is to be unhappy, you will be miserable, no matter what you have. If your goal is to be happy, you will succeed, no matter what you lack. The saying is at the heart of my general optimism – my strong belief in focusing on what I have, not on what I could have had. Because of my strongly optimistic nature, I have at times been accused of being a “permabull.” In trading and short-term oriented market calls (which one should actually not even attempt!), I am truly not always optimistic. When it comes to long-term investing in the stock market, if you are not optimistic, the odds are actually stacked against you. See in the equity market (particularly in a broad, deep bourse such as that of the United States, let alone the aggregate global equity market), it pays to be optimistic in the long run. Equities are indeed the best, most secure investment path to long-term wealth – long have been and always will be. The key is a true long-term orientation. I believe that one of the key reasons for this is that a well diversified portfolio of global leaders will, in the aggregate, have the pricing power to pass on inflation, and then some. In addition, I also have the following hypothesis. As I implied in a previous note, the news media, to attract eyeballs, has a permanent pessimistic bias. Bad, scary news always sold newspapers, got audiences for radio and TV newscasts and now generates click-throughs. Thus, long-term equity investing gives us sort of a “time arbitrage opportunity.” In the long run, there will be more negative than positive news headlines. A dollar-cost averaging approach to long-term stock investing (in a global equity marketplace where the long-term trend is up, but punctuated by periodic sell-offs, often triggered by such negative news) is the best path to invest for wealth creation. This frees the small investor from having to dedicate the time and effort to individual security selection (let alone even attempting to time the market). The dollar cost averaging method simply entails investing the same amount of currency on a periodic basis (say monthly) in the same stock or basket of stocks (say the ACWI exchange traded fund). This approach enables the investor to buy more shares when they are down in price, fewer when they are up, optimizing the investor’s average cost basis. Finally, I would also advocate automatically reinvesting the dividends, in order to fully benefit from the compounding effect (particularly if you can put your ACWI investment in a tax deferred or after-tax investment vehicle, such as an IRA, 401k, Roth IRA or Roth 401k).

Canada ETFs Fizzle Out On 2014’s Massive Oil Plunge – ETF News And Commentary

Falling crude oil prices have hit the headlines as of late, and some are worried that prices might remain in the doldrums. This liquid commodity is touching a new low almost every day due to poor end-market demand and rising inventory worries across the globe. Weakness was widespread among most global economic superpowers including the Euro zone, China and Japan, putting a lid on crude oil prices. A relatively stronger greenback also played into the broad oil weakness as well. This week, oil hit yet another five-year low in the wake of soaring global supplies as confirmed by the OPEC report and a jump in U.S. output. On December 10, benchmark U.S. crude also touched $60 per barrel. Late last month, OPEC announced ‘no-cut’ in production, engaged in a price war and then forecast a drop in demand next year. OPEC expects global demand for crude to hit its lowest level in over a decade next year, much below the present production level. Notably, crude oil lost about 40% since June (read: 3 Energy ETFs Hit the Most by OPEC’s ‘No Cut’ Decision ). Canadian Impact While this carnage forced most markets to pare gains, it especially came as a shot across the bow to Canada investing. Canada, which is among the world’s top 10 oil producers, saw its stocks taking the deepest single-day dive in 18 months (read: If Oil Prices Keep Falling, Avoid These 4 Country ETFs ). Per Bloomberg , oil, banking and materials were the laggards in Canada long after 1988, stoking concerns about the future of its economy. The S&P/TSX Composite Index, made up of large-cap stocks listed on the Toronto stock exchange, slumped 2.3% on December 10, thanks to its heavy weight on energy. The average Canadian price for gasoline dropped to C$1.06 a liter , in early December from C$1.35 a liter in June marking the steepest yearly decline in five years, as noted by Bloomberg. In fact, the nation’s central bank lately expressed concerns about economic well-being, forecasting that the oil rout might reduce ‘Canada’s economic growth by 1/3 of a percentage point in 2015’. The latest guidance was harsher than the previous one which speculated a ¼ point cut. To add to this, a broad-based commodity crash will likely weigh on the nation. Though Canada’s economic prospects do not appear gloomy with better-than-expected GDP in Q3 (2.8% versus the estimated 2.1%), a better inflationary outlook, a stronger export competitiveness due to the falling currency relative to the greenback and the increasing purchasing power of the U.S. consumers, the oil tumult has definitely been a downside risk. Market Impact Investors should note that Canadian bourses have fallen behind the S&P 500 in the last four years, per Bloomberg . We get ominous cues for next year too. Given this, Canada ETFs should be closely watched in the days ahead. For those investors, we have highlighted the set of ETFs that could be in focus in the coming days, and especially if oil prices take a sharp turn: Presently there are six Canada ETFs available in the market among which Canadian Energy Income ETF (NYSEARCA: ENY ) being an energy-oriented ETF, shed the most this year. ENY was down over 20% in the year-to-date frame. Apart from this, the best way to invest in Canada is iShares MSCI Canada ETF (NYSEARCA: EWC ), a product that has nearly $2.73 billion in assets. The fund tracks the MSCI Canada Index, holding just under 100 stocks in its basket. Although financials take the top spot at 39.05%, energy makes up a huge chunk of assets accounting for 22.1% of the total. The fund was off 8% in the last one month and is down about 4% so far this year. Small Caps and New Funds Canada AlphaDEX Fund (NYSEARCA: FCAN ) ─ a $36.1 million ETF ─ invests one-third of its portfolio in energy stocks followed by 18% and 16% focus respectively on the two other struggling sectors ─ materials and finance. Year-to-date, FCAN was down 15% while the fund has shed about 11% in the last one month. IQ Canada Small Cap ETF (NYSEARCA: CNDA ) invests about 30% of its $13.2 million portfolio in energy stocks. Materials stocks take about 23% focus. CNDA is down 14% so far this year. Another small-cap ETF MSCI Canada Small Cap Index Fund (BATS: EWCS ) has $3.1 million in assets. Like its big brother, this iShares ETF too invests the most in energy (22.1%) followed by materials (21.8%) and financials (16.8%). EWCS is off 12% this year. We finally have SPDR MSCI Canada Quality Mix ETF (NYSEARCA: QCAN ), which joined the market just this year only. The product has $2.9 million assets with financials taking the top spot at 33.7% followed by energy at 20.8% and consumer discretionary at 11%. QCAN has lost 7% in the last one month. Investors should note that EWC, FCAN, CNDA and EWCS each have a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.