Investing in Fidelity Health Care Fund: Is it Worth the Risk?

Investing in Fidelity Health Care Fund: Is it Worth the Risk?

Are you considering investing in Fidelity Health Care Fund but wondering if it’s worth the risk? As with any investment, there are potential benefits and drawbacks to consider. In this article, we will explore the fund’s history, performance, and portfolio to help you make an informed decision.

The History of Fidelity Health Care Fund

Fidelity Health Care Fund was established in 1985 and is managed by Eddie Yoon. The fund’s objective is to invest in companies involved in healthcare and related industries, including pharmaceuticals, biotechnology, and medical devices. It is a mutual fund, meaning that the investment is spread out among multiple companies, reducing the risk of investing in just one individual stock.

Performance of Fidelity Health Care Fund

Over the years, Fidelity Health Care Fund has generated impressive returns for its investors. According to Morningstar, the fund has an average annual return of 16.48% over the past 10 years (as of August 2021), significantly outperforming the S&P 500’s average annual return of 14.52%.

However, it is important to note that past performance does not guarantee future results, and the fund’s returns have had their share of ups and downs. In 2020, for instance, the fund’s return was -3.71%, a significant drop from the previous year’s return of 23.75%.

The Fund’s Portfolio

Fidelity Health Care Fund invests primarily in companies involved in healthcare and related industries. Its top holdings include companies such as UnitedHealth Group, Johnson & Johnson, and Moderna.

It’s also worth noting that the fund has a significant exposure to the biotechnology sector, which generally carries higher risk due to the nature of the industry. As of June 2021, biotechnology stocks accounted for approximately 40% of the fund’s portfolio.

Is Fidelity Health Care Fund Worth the Risk?

Investing in Fidelity Health Care Fund can potentially provide significant returns for investors, based on its past performance. However, as with any investment, it’s important to consider the risk and suitability for your own financial goals.

Some potential risks to consider include the biotechnology sector’s inherent volatility and the healthcare industry’s susceptibility to political and regulatory changes. Moreover, investing in mutual funds carries its own risks, including management fees and potential transaction costs.

Ultimately, the decision to invest in Fidelity Health Care Fund should be based on your individual investment goals, risk tolerance, and preferences. It is important to conduct thorough research and consult with a financial advisor before making any investment decisions.

Conclusion

Fidelity Health Care Fund has a strong track record of generating impressive returns for investors over the past few decades. However, past performance does not guarantee future results, and it’s crucial for investors to consider the risks involved before making any investment decisions.

As always, we recommend conducting careful research and consulting with a financial advisor before making any investment decisions. By doing so, you can make an informed decision that aligns with your investment goals and risk tolerance.