Minutes from the Federal Reserve’s Federal Open Market Committee (FOMC) meeting held March 17-18 highlighted the need to combat higher inflation while supporting an improving economy. At the FOMC meeting of 2026 held Jan. 26-27, the benchmark interest rate was set at 3.50-3.75%. While some FOMC members said they would consider raising interest rates to combat higher inflation if it continues, others said an economic slowdown caused by geopolitical conflict could at some point justify a cut in interest rates.
Over the past month, the war between the United States and Iran has created uncertainty in the economic outlook, with a sharp rise in oil prices. Although oil prices later eased following a temporary ceasefire, this created uncertainty in the markets.
With much uncertainty and a volatile nature in the overall market, health care mutual funds have become attractive options for investment. The medical services, pharmaceuticals and medical devices sector is non-volatile in nature and is largely independent of interest rate fluctuations as well as energy-driven inflation. In general, the beta for health care companies is relatively low, which implies lower volatility in their stock prices when compared to the overall market. These are essential services that provide vital healthcare solutions to mankind and are therefore certain to attract customers in bad times as well as good times.
We have chosen three healthcare mutual funds, Franklin Biotechnology Discovery Fund (FBDIX), Fidelity Select Pharmaceuticals Port (FPHAX), and Janus Henderson Global Life Sciences (JNGLX), which investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.
Franklin Biotechnology Discovery Fund seeks capital appreciation. FBDIX invests most of its net assets in equity securities of biotechnology companies and discovery research firms worldwide, including therapeutics, drug delivery, gene therapy, and other select medical companies.
Evan S. McCulloch has been the lead manager of FBDIX since Sept. 15, 1997. Most of the fund’s holdings were in companies like Gilead Sciences, Inc. (5.6%), Vertex Pharmaceuticals Inc (4.6%) and Amgen Inc. (4.5%) as of Oct. 31, 2025.
FBDIX’s 3-year and 5-year annualized returns are 24.6% and 6.6%, respectively. Its net expense ratio is 1.05%. FBDIX has a Zacks Mutual Fund Rank #1.