T. Rowe Price Health Sciences
Trend: Baby boomers/aging populations
Since the 1970s, healthcare expenditures have doubled as a percentage of GDP, reaching about 16%. At the same time nearly 10,000 people become eligible for Medicare every day.
Keep those figures in mind whenever pundits weeble and wobble over healthcare-based legislation coming down from Capital Hill. Health-related spending is going to remain strong in the U.S., one way or another. Not to mention, large, aging populations aren’t just an American phenomenon — parts of Asia and Europe are experiencing the exact same thing.
One of the top mutual funds in the healthcare space is T. Rowe Price Health Sciences (MUTF:PRHSX).
Kris Jenner, who manages PRHSX’s more than $5 billion in assets, likes to focus on mid- and small-cap companies — especially those that have the potential for creating blockbuster drugs, which in turn help create blockbuster returns. Some of the fund’s top holdings include biopharma outfits like Alexion Pharmaceuticals (NASDAQ:ALXN), Pharmacyclics (NASDAQ:PCYC) and Gilead Sciences (NASDAQ:GILD).
Despite his penchant for smaller firms, Jenner still takes a buy-and-hold approach, reflected in a low turnover rate of about 23% for PRHSX. Fees also are a low 0.82%.
This year, the fund has posted a stellar return of 33.5%, but that’s hardly a fluke. PRHSX has averaged roughly 14% returns over the past decade, helping the fund earn Morningstar’s top rating of five stars.