Three healthcare mutual funds standing out amid mixed labor data

The combination of mixed U.S. employment data and decreased expectations about future Federal Reserve rate adjustments has put focus on defensive market segments. The U.S. Department of Labor released data that showed September 2025 payrolls increased by 119,000 while unemployment rates rose to 4.4% from 4.3% and hourly wages experienced a 0.2% increase. The effective federal funds rate at 3.88% during mid-November, which indicates that monetary policy continues to operate at a tight level.

In this scenario, the healthcare mutual fund sector is more attractive for investment because the healthcare sector performance remains stable against interest rate changes and market economic volatility. The U.S. Department of Labor shows that healthcare employment increased by 43,000 positions during September 2025, and year-over-year growth continues to trend above historical norms, with healthcare employment rising by roughly 498,000 jobs compared with August 2024, per the Bureau of Labor Statistics.

Healthcare companies maintain low beta values, which result in less market volatility for their stock prices during times of market uncertainty. Medical services operate with continuous cash flow because their core business operations protect them from economic recessions. The pharmaceutical industry maintains solid business performance during economic recessions because people require medications at the same level throughout all market conditions. Healthcare mutual funds function as protective investment options as market confidence starts to wane.

Thus, from an investment standpoint, we have selected three solid healthcare mutual funds, namely, Franklin Biotechnology Discovery Fund (FBDIX), Fidelity Advisor Biotechnology Fund (FBTIX) and Janus Henderson Global Life Sciences Fund (JNGLX) for stable returns amid an economic downturn. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases.

The selected mutual funds boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio.

Franklin Biotechnology Discovery Fund seeks capital appreciation. FBDIX invests most of its net assets in equity securities of biotechnology companies and discovery research firms.

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. (7.5%), Vertex Pharmaceuticals Inc (6.6%) and Amgen Inc. (5.8%) as of July 31, 2025.

FBDIX's 3-year and 5-year returns are 20.9% and 7.4%, respectively. The annual expense ratio is 1.01%. FBDIX has a Zacks Mutual Fund Rank #1.

Fidelity Advisor Biotechnology Fund seeks capital appreciation. Most of its net assets are invested in common stocks of foreign and domestic companies that are principally engaged in the research, development, manufacture and distribution of various biotechnological products, services, and processes, and companies that benefit significantly from scientific and technological advances in biotechnology.

Eirene Kontopoulos has been the lead manager of FBTIX since July 15, 2018. Most of the fund's holdings were in companies like AbbVie Inc. (18%), Alnylam Pharmaceuticals, Inc. (8.6%) and Gilead Sciences, Inc. (7.5%) as of July 31, 2025.

FBTIX's 3-year and 5-year returns are 16.4% and 10.2%, respectively. The annual expense ratio is 0.71%. FBTIX has a Zacks Mutual Fund Rank #1.

Janus Henderson Global Life Sciences Fund invests most of its assets, along with borrowings, if any, in securities of companies that, according to its portfolio managers, have a life science orientation. JNGLX has a fundamental policy to invest at least a small portion of its assets in companies that belong to the "life sciences" sector.

Andy Acker has been the lead manager of JNGLX since May 1, 2007. Most of the fund's holdings were in companies like Eli Lilly & Co (8.8%), UnitedHealth Group Inc (4.5%) and AstraZeneca PLC (4.1%) as of June 30, 2025.

JNGLX's 3-year and 5-year returns are 10.2% and 9%, respectively. The annual expense ratio is 0.80%. JNGLX has a Zacks Mutual Fund Rank #2.

Want the latest recommendations from Zacks Investment Research? Download 7 Best Stocks for the Next 30 Days. Click to get this free report