ColleG e P lannI n G | eSTaT e P lannI n G | I nveSTIn G | PORTFOlIO SPOTlIgHT | real eSTaT e | reTIremenT | Ta X P lannI n G
Fidelity Select Health Care Portfolio
TICkER ASSETS
FSPHX $ 10.6 billion
PERFORmAnCE YTD 1 yr . 3 yr . 5 yr . 10 yr . 15 yr . 9.2 % 26.8 % 18.1 % 18.9 % 18.6 % 14.9 %
Performance and asset numbers as of 6 / 24 / 21 . Three- , five- , 10- and 15-year figures are average annual total returns . Sources : Fidelity Investments and morningstar
TOP FIvE HOldIngS
UnitedHealth Group Inc .; Humana Inc .; Cigna Corp .; Boston Scientific Corp .; Danaher Corp .
COnTACT InFO 800.343.3548 • fidelity . com
Eddie Yoon
SECTOR AllOCATIOn ( as a % of portfolio ) |
Healthcare equipment |
22.20 |
Biotechnology |
21.91 |
managed Healthcare |
19.09 |
Pharmaceuticals |
13.84 |
Healthcare Services |
8.48 |
life Sciences Tools & Services |
8.36 |
Healthcare Facilities |
2.58 |
Healthcare Technology |
2.37 |
leisure Products |
0.17 |
other Diversified Financial Services 0.07 |
Investment Banking & Brokerage |
0.06 |
Holdings and sector weightings as of 4 / 30 / 21 . Sources : Fidelity Investments and morningstar |
Old Fund , Spry Returns
The Fidelity Select Health Care Portfolio is a 40-year-old fund that leaves many of its younger peers in the dust . By Jeff Schlegel
In THe WoRlD oF MUTUAl FUnDS , THe FIDelITY SeleCT Health Care Portfolio fund is a graybeard . It hit the market in July 1981 when the fund ’ s portfolio manager , eddie Yoon , 41 , was still in his crib . But age is just a number for a fund , and the real numbers that matter pertain to shareholder returns . And under Yoon ’ s guidance since late 2008 , this fund has delivered strong results that have put it in the top quartile of its healthcare fund peers in the last three- , five- 10- and 15-year periods , according to Morningstar .
Still , the fund ’ s one-year performance ( through June 24 ) had lagged both the S & P 500 and the fund ’ s bogey , the MSCI U . S . IMI Health Care 25 / 50 Index , in part because of disappointing performance from a couple of holdings . But Yoon remains focused on the sectors he believes are the growth drivers in U . S . healthcare and which have produced strong investment returns in recent years . Those include healthcare equipment , biotechnology and managed healthcare , which were the fund ’ s three largest sub-industry sectors as of April 30 .
Any 40-year-old mutual fund is bound to see some ebbs mixed in with the flows . Research from Morningstar Data shows the average life of surviving U . S . -domiciled open-end funds from inception is roughly 16 years and 10 months , which makes the longevity of the Fidelity fund stand out . Its performance also stands out , which speaks to Yoon ’ s ability to find profitable trends within the fast-changing healthcare world .
“ Healthcare is such a dynamic industry to invest in ,” he says . “ The portfolio ’ s complexion has changed over time based on where we see opportunities and risk , but the process we deploy to try to generate returns hasn ’ t changed from the beginning .”
Healthcare never goes out of style , and it ’ s one of those sectors that seems like a no-brainer investment opportunity for as long as human beings will exist on this planet . Developed nations in the West , as well as Japan and China , are grappling with the health issues of their aging populations . Developing nations have younger demographics , which require different health needs . But this isn ’ t a monolithic industry , and some
50 | FInanCIal aDvISor maGazIne | JUlY / aUGUST 2021 www . Fa-maG . Com