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Mutual Funds Spotlight – T. Rowe Price Health Science Fund


The T. Rowe Price Health Science Fund (MUTF: PRHSX) is a sector-focused mutual fund for investors who want to make a bet on this specific industry. As the name implies, the health science fund invests in companies expected to benefit from changes in the healthcare, medicine or life sciences fields.

Mutual fund investors should recognize that this is not a diversified fund, so it can be subject to more risk based on the ups and downs of the helathcare sector. But the T. Rowe Price Health Science Fund may appeal to longer-term growth seeking investors who are looking to get in on some of the up-and-comers in the biotech field, or socially responsible investors who support life saving or life changing research.

Here are the specifics for the T. Rowe Price Health Science Fund for today’s mutual fund spotlight:

Investing Strategy:   If you believe that some of the most promising and profitable health care discoveries are on the horizon then the T. Rowe Price Health Science Fund may be the mutual fund for you. The fund is aggressive, allocating nearly 99% of its assets in the common stock of companies engaged in the research, development, production, or distribution of products or services related to health care, medicine, or the life sciences. While the fund can invest in companies of any size, the fund’s managers prefer to a majority of assets in large- and mid-cap companies.

Expense Ratio: With a 0.87% expense ratio, the fund is cheap even with the $75 transaction fee and is among the higher rated funds with a Morningstar Rating of 4 stars.

Top 5 Holdings: The top stocks in the T Rowe Price Health Science Fund include pharmaceuticals specialists Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) at 6.42% and Valeant Pharmaceuticals International, Inc. (NYSE: VRX) at 3.59%, biopharmaceutical company  Gilead Sciences, Inc. (NASDAQ: GILD) at 3.04% , medical device and health care products maker  Covidien, Ltd. (NYSE: COV) at 2.23%, and biopharmaceutical and cancer treatment developer Celgene Corporation (NASDAQ: CELG) 2.19%

Returns: The one-year return of 43.3% outperformed the broader market’s return of 25% during the same period. Its five-year return of 50.5% far exceeds the Dow Jones Industrial Average’s and S&P 500’s respective 13.1% and 6% five-year returns.

Other Fund Statistics

  • Total Assets: $3 billion (as of 5/19/11)
  • Minimum Investment: $2,500
  • Fund manager: Kris. H. Jenner
  • Manager’s Tenure: Since January 2000

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