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Value Line’s Health objective group is comprised of funds whose stated policy is to invest at least 50% of their assets in companies primarily engaged in healthcare and related businesses. 

One fund with a relatively high year-to-date return through the four months ended April 30, 2010 is Prudential Jennison Health Sciences Fund A (PHLAX). This fund’s investment objective is long-term capital appreciation.

To achieve its objective, the fund normally invests at least 80% of its assets in equity and equity-related securities of companies in the health sciences sector, such as pharmaceutical companies, biotechnology companies, medical device manufacturers, healthcare service providers, and health maintenance organizations.

The fund may have two separate segments: the strategically managed portfolio and the enhanced index portfolio. However, as of January 29, 2010, it only had a strategically managed portfolio. 

The strategically managed portfolio holds those equity and equity-related securities in which the portfolio managers have the highest confidence. Management uses fundamental and quantitative analyses to select individual securities. It may invest more than 5% of the fund’s assets in any one issue.

The enhanced index portfolio would contain healthcare and related securities chosen from the S&P Supercomposite 1500 Index. This index is comprised of stocks in the S&P 500 Index, the S&P MidCap 400 Index, and the S&P SmallCap 600 Index. The managers build this portfolio, when they choose, as a way to control the risk of underperforming benchmark indexes by keeping industry weightings close to those in the benchmark. They use this portfolio with the strategically managed portfolio, and hope the strategically managed portfolio will outperform the enhanced index portfolio to produce higher returns.

Another fund with very good year-to-date return is Fidelity Select Biotechnology Fund (FBIOX). This fund seeks capital appreciation.

The fund normally invests at least 80% of its assets in the securities of companies principally engaged in the research, development, and manufacture of various biotechnological products, services, and processes, as well as companies that benefit significantly from scientific and technological advances in biotechnology. 

Management is free to invest in domestic or foreign issues, and uses fundamental analysis to select individual stocks. It examines each issuer’s financial condition and industry position, as well as market and economic conditions. These criteria are reviewed continuously, and contribute to higher-than-average turnover.  For the twelve months ended December 31, 2009, the fund’s portfolio turnover rate was 109% of the average value of its portfolio.

A third fund with a very good return through the first four months of 2010 is Rydex Biotechnology A Fund (RYBOX). This fund’s objective is capital appreciation. 

To achieve this objective, under normal circumstances, the fund invests at least 80% of its assets in companies that participate in the biotechnology industry, including companies involved in research and development, genetic or other biological engineering, and in the design, manufacture, or sale of related biotechnology products or services. Management uses options and derivatives to increase returns and/or reduce risk.

In the table below, we have listed 10 top-performing funds through April 30, 2010 that we follow in our Fund Advisor database.

10 Top Health Funds Performance

Fund Name

Ticker

% Year-to-Date

Total Return

% 1 Month

Total

Return

% 3

Month

Total

Return

% 6 Month

Total

Return

% 5 Year

Total

Return

Annualized

Prudential Jennison Health Sciences A

PHLAX 

12.66

1.65

10.97

30.76

9.66

 

Fidelity Advisor Biotechnology A

FBTAX 

11.75

1.20

9.50

 

24.75

6.87

 

Franklin Biotechnology Discovery A

FBDIX 

11.25

1.13

8.72

20.09

7.16

Fidelity Select Biotechnology

FBIOX 

10.90

-0.01

8.68

24.37

7.21

Rydex Biotechnology A

RYBOX 

9.49

-1.39

5.52

21.77

 

Manning & Napier Life Sciences

EXLSX 

8.58

0.88

8.68

21.14

7.95

Eaton Vance Worldwide Health Sciences A

ETHSX 

8.48

-1.32

6.58

16.40

6.14

T. Rowe Price Health Sciences

PRHSX 

7.57

-1.26

6.79

20.66

10.26

Fidelity Select Medical Equipment & Systems

FSMEX 

7.07

-1.10

5.94

18.61

7.21

Fidelity Advisor Health Care A

FACDX 

6.75

-0.95

6.32

18.38

4.48

Health Objective Group

 

4.39

-1.83

4.04

15.99

4.43