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Fund Spy

Betting Responsibly on Healthcare

These funds offer thoughtful investments in healthcare, not tactical plays.

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This article was originally published in the November 2016 issue of Morningstar FundInvestor. After its release, the results of the presidential election prompted a brief surge in healthcare stocks. However, while the typical health-sector fund gained 3.7% in November, it was still down 10.4% for the year through Dec. 11, even as all other domestic sector and diversified stock fund categories remained well in the black. Download a complimentary copy of FundInvestor here.

Healthcare funds were down 13.4% for the year through Oct. 31, following a big rally in prior years. Morningstar's stock analysts see opportunities here: They expect pricing power for drug and biotech companies to remain strong, research and development to remain productive, and mergers and acquisitions to continue at a steady pace.

Laura Lallos does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.