Tag Archives: zacks funds

4 Funds To Buy On Healthy Medical Sector Earnings

Ongoing worries, including weak global growth, strengthening dollar and the persistent slump in oil price, appear to have affected Q4 corporate earnings. Amid this dismal backdrop, the medical sector has emerged as one of the few bright spots. And the sector’s outlook for the coming quarters also looks impressive. As such, fundamentally strong funds from this sector may offer favorable investment propositions. Medical Sector Outperforms Total earnings of the 388 S&P 500 members that reported Q4 results as of Feb 17 declined 6.4% year over year on 4.6% lower revenues. And nine out of the 16 Zacks sectors are expected to suffer an earnings decline in their Q4 results. Total earnings for the S&P 500 members are expected to decline 6.7% year over year. In spite of the overall softness, companies from the medical sector that have reported as of Feb. 17 registered total earnings growth of 7.4% on 9.1% higher revenues. The sector is expected to witness earnings growth of 9.2% on 9.4% higher revenues for the quarter. Earnings and revenues for the sector are also expected to grow in 2016. For the ongoing quarter, the sector is predicted to register earnings and revenue growth of 3.8% and 8.4%, respectively. Some of the major players from this sector including Regeneron Pharmaceuticals (NASDAQ: REGN ), UnitedHealth Group Inc. (NYSE: UNH ) and Gilead Sciences, Inc. (NASDAQ: GILD ) posted impressive results for the fourth quarter. What Will Boost Medical Sector in 2016? The Affordable Care Act (ACA) is likely to play an important role in boosting the healthcare sector this year. With a gradual decline in the unemployment rate and healthy job additions over the past few months, new employees should widen the coverage of health insurance and perk up demand in the sector. Moreover, government spending on healthcare is also expected to rise nearly 4.9% this year. It is estimated that Medicare and Medicaid spending may increase to over $1.25 trillion in 2016. Further, merger and acquisition activities in the broader medical sector are expected to remain strong in 2016 and be significant catalysts to the sector’s growth. Separately, advancement in technology and innovation should also bode well for the space. Advances in genomics, biotechnology and artificial intelligence have not only helped the sector to grow over the past few years, but are also likely to be the growth drivers in the years to come. 4 Funds to Consider Given these encouraging earnings performance and promising outlook, we present four healthcare mutual funds that are significantly exposed to medical sector and carry either a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (Buy). We expect these funds to outperform their peers in the near future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund. These funds have strong three- and five-year annualized returns. The minimum initial investment is within $5000. Also, these funds have a low expense ratio and no sales load. T. Rowe Price Health Sciences (MUTF: PRHSX ) invests a major portion 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. PRHSX currently carries a Zacks Mutual Fund Rank #1 and has three- and five-year annualized returns of 20.6% and 21.2%, respectively. The annual expense ratio of 0.77% is lower than the category average of 1.36%. Fidelity Select Medical Equipment & Systems (MUTF: FSMEX ) seeks growth of capital. The fund invests the lion’s share of its assets in companies that are primarily involved in operations related to medical equipment and devices and the related technologies sector. The fund focuses on acquiring common stocks of both U.S. and non-U.S. companies. FSMEX currently carries a Zacks Mutual Fund Rank #1 and has three- and five-year annualized returns of 16.3% and 12.7%, respectively. The annual expense ratio of 0.77% is lower than the category average of 1.36%. Hartford Healthcare HLS IA (MUTF: HIAHX ) invests most of its assets in equities of healthcare-related companies of any size across the globe. The sub-adviser selects the equity securities and the issuers may be from other countries, including the U.S. cash balances of HIAHX are not expected to be more than 10% of its assets. HIAHX currently carries a Zacks Mutual Fund Rank #1 and has three- and five-year annualized returns of 18% and 17.4%, respectively. The annual expense ratio of 0.88% is lower than the category average of 1.36%. Fidelity Select Health Care Portfolio (MUTF: FSPHX ) seeks capital growth over the long run. The fund invests a major portion of its assets in companies involved in designing, manufacturing and selling healthcare products and services. The fund invests in companies across the world. FSPHX currently carries a Zacks Mutual Fund Rank #2 and has three- and five-year annualized returns of 21.2% and 18.2%, respectively. The annual expense ratio of 0.74% is lower than the category average of 1.36%.

4 Best-Rated Utility Mutual Funds For Stable Returns

Investors with a conservative mindset looking for stable current income would do well to consider utility funds. They are used as defensive instruments, which protect investments during a market downturn. This is because the demand for essential services such as those provided by utilities remains unchanged even during difficult times. In recent years, many funds in this category have increased their exposure to emerging markets and unregulated companies. Though this strategy has increased the risk involved, it has also generated higher returns. Below, we will share with you 4 top-rated utility mutual funds . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) as we expect these mutual funds to outperform their peers in the future. AllianzGI Global Water Fund A (MUTF: AWTAX ) seeks long-term capital growth. AWTAX invests a major portion of its assets in common stocks of companies that are represented in the S&P Global Water Index, the NASDAQ OMX US Water or Global Water Indices or the S-Network Global Water Index, or are involved in water-related activities. AllianzGI Global Water A is a non-diversified fund and has a three-year annualized return of 3.6%. Andreas Fruschki is the fund manager since 2008. Kinetics Alternative Income Fund C (MUTF: KWICX ) invests a large portion of its assets in the Alternative Income Portfolio, a series of Kinetics Portfolios Trust that holds a portfolio of primarily fixed-income securities. KWICX seeks to provide current income. Kinetics Alternative Income Fund C is a non-diversified fund and has a three-year annualized return of 1.3%. As of September 2015, KWICX held 327 issues, with 11.58% of its total assets invested in the iShares 1-3 Year Credit Bond. American Century Utilities Fund Inv (MUTF: BULIX ) seeks current income and capital appreciation. BULIX invests a major portion of its assets in equities related to the utility industry. BULIX’s portfolio is based on qualitative and quantitative management techniques. In the quantitative process, stocks are ranked on their growth and valuation features. American Century Utilities Fund is a non-diversified fund and has a three-year annualized return of 9.9%. BULIX has an expense ratio of 0.67% as compared to the category average of 1.25%. Putnam Global Telecommunication Fund B (MUTF: PGBBX ) invests a large portion of its assets in both mid and large capitalization companies across the world. PGBBX generally invests in securities of companies that are part of the telecommunication industry. Putnam Global Telecommunication B is a non-diversified fund and has a three-year annualized return of 6.5%. Vivek Gandhi is the fund manager since 2008. Original post

5 ETFs For Portfolio Safety, Stability And Diversification

Global stock market volatility, oil price collapse and economic slowdown in China continue to rattle investor confidence this year. Former high flying stocks have come back to earth in the past few weeks as investors worry about the impact of weak global demand on corporate earnings. Investors had poured a lot of money into these stocks despite their sky high valuations but “risk-off” sentiment is sending many to “safer” assets now. As the domestic economy continued to recover slowly but steadily over the past few years, US stocks remained one of the best asset classes in the world. But of late, domestic economic growth has been rather uneven. In the current uncertain market environment, it would be better for investors to focus on capital preservation. Below we have discussed some ETFs that will not only provide stability and diversification to your portfolio but also help in capital preservation. Long-Term Treasury Bonds The Federal Reserve spent the last year prepping the markets for a rate hike for the first time in almost a decade and ultimately raised rates by 25 bps in December and also penciled in four rate hikes this year. The market however expects not more than one rate increase this year. So, bond markets continue to frustrate bears again. Longer-term bonds are impacted more by inflationary expectations than by monetary actions and with expectations so muted, the bullish trend for these ETFs is likely to continue. Then while rates are low here in the US, they are much lower in the other parts of the developed world. In Europe and Japan, monetary authorities are expected to continue easing in order to fight deflationary risks. So, compared with those interest rates, US interest rates are still very attractive for foreign investors. 25+ Year Zero Coupon U.S. Treasury Index Fund (NYSEARCA: ZROZ ) ZROZ follows the BofA Merrill Lynch Long US Treasury Principal STRIPS Index, which focuses on Treasury principal STRIPS that have 25 years or more remaining to final maturity. It charges just 15 basis points in expenses while the 30-day SEC yield is 2.53% currently. iShares 20+ Year Treasury Bond ETF (NYSEARCA: TLT ) TLT tracks the Barclays Capital U.S. 20+ Year Treasury Bond Index. It is the most popular and liquid ETF in the space with AUM of over $9.4 billion and excellent daily trading volumes. The fund charges 15 bps in expense ratio while the 30-day SEC yield is 2.34% currently. Both these ETFs have Zacks ETF Rank #2 (Buy). Gold On Monday, gold recorded its biggest daily gain in more than 14 months as a strong risk-off sentiment continues to force investors to pile into the safety of the precious metal. Additionally, a falling dollar (commodity prices generally move inversely to the dollar) and rising demand in China and India-the two biggest consumers of gold in the world-have also been helping gold’s ascent. Chinese investors in particular have been buying gold lately as the country’s stock market and currency continue to swoon. Negative interest rates in some of the major countries are also boosting gold prices. Gold critics often argue that the “barbarous relic” is an unproductive asset since it pays nothing to holders and that argument does make some sense when interest rates are high but not in the ultra-low/negative interest rate environment. iShares Gold Trust (NYSEARCA: IAU ) IAU provides a convenient and cost-effective access to physical gold. It is a physically backed ETF with more than $5.2 billion in assets. The fund has beta of -0.23 with the S&P 500 index and adds diversification benefits to an equity focused portfolio. SPDR Gold Trust ETF (NYSEARCA: GLD ) GLD is the most popular gold ETF with almost $29 billion in AUM and excellent trading volumes. It is a physically backed ETF that charges 40 basis points in annual expenses. While IAU has a lower fee, GLD’s excellent trading volumes make its trading very cheap. So, IAU is more suitable for buy and hold investors while GLD is better for trading portfolios. Municipal Bonds Municipal bonds were one of the best performing asset class in the US fixed income space last year. There are many factors that suggest that they may continue to outperform this year as well, including decreasing supply, rising tax rates and juicy income yields in the current ultra-low rate environment. Municipal bonds supply as of the end of last year was about $400 billion , boosted mainly by refunding issuances in anticipation of higher interest rates. Experts expect the supply to decrease by about 25% this year. iShares Muni Bond ETF (NYSEARCA: MUB ) MUB is the most popular ETF in the municipal bond space with more than $6.1 billion in AUM. It charges 25 bps in expenses and has a 12-month yield of 2.49%. The income is exempt from federal taxes and the Alternative Minimum Tax (AMT). The product provides a convenient access to more than 2000 investment grade municipal bonds. The Bottom-Line During times of turmoil, it is most important for investors to stay focused on their longer-term investing goals. Further, it is beneficial to stay diversified as history has shown us diversified portfolios always have better risk-adjusted returns over longer periods. Original post