3 Healthcare Mutual Funds to Navigate Through Market Volatility


Inflation cooled in February, bringing some respite to the markets. However, the euphoria was short-lived as stocks resumed their decline on Thursday, with the S&P 500 entering correction territory.

Ongoing global tensions, President Donald Trump’s tariffs and uncertainty over the next rate cut persist, which could keep markets volatile.  Given this situation, it would be safe to invest in healthcare funds, to safeguard their investments.

Three such funds are Vanguard Health Care Fund VGHCX, Fidelity Select Health Care FSPHX and Janus Henderson Global Life Sciences D JNGLX.

Fresh data released on Wednesday showed that the consumer price index (CPI) rose 0.2% sequentially in February, below the consensus estimate of a rise of 0.3%. Year over year, CPI increased 2.8% in February, which was also lower than analysts’ expectations of a rise of 2.9%.

Core CPI, which excludes the volatile food and energy prices, climbed 0.2% sequentially in February and 3.1% from the year-ago levels, both below the consensus estimates. Stocks tried to stage a comeback following the release of the report but volatility returned a day later, with the S&P 500 entering correction territory after falling 1.4% on Friday. The Nasdaq had already entered correction territory earlier this month.

Inflation has been on the rise over the past few months and finally showed signs of cooling for the first time in February. However, price pressure continues to hurt consumers as inflation is still sharply higher than the Federal Reserve’s 2% target.

Stubbornly high inflation compelled the Federal Reserve to halt rate cuts in its January meeting. The Federal Reserve has adopted a cautious approach and is unlikely to cut interest rates in its upcoming March meeting.

Uncertainty over the economy’s health has grown over the past several weeks as investors fear that Trump’s tariff policies could trigger a global trade war, which could see the economy slipping into recession.

Trump has already imposed 25% tariffs on several Canadian and Mexican imports. Additionally, he has imposed 10% tariffs on Chinese goods and shared plans to impose tariffs on the European Union.

Trump’s tariffs have intensified market turmoil, causing stock fluctuations. This volatility is expected to persist until investors gain a clearer understanding of his tariff policies. Given this situation it would be ideal to invest in funds from defensive sectors such as healthcare.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *