Is a Bright Future Coming for This Fidelity Health Care Fund? Discover What Investors Need to Know!

Health care stocks are making a comeback in 2025, outperforming the S&P 500, which is down 14% so far this year. In contrast, health care stocks have only slipped by about 2%.

One fund to note is the Fidelity Select Health Care Portfolio (FSPHX). Although it’s lagging this year, it’s outperformed 65% of its peers over the past 12 months, despite a 6.9% loss.

Investors are seeing gains from medical device companies like Boston Scientific and biotech firms like Alnylam Pharmaceuticals. However, managed care companies like UnitedHealth Group are struggling due to uncertainty over government policies regarding Medicare.

Ed Yoon, a fund manager, notes that inflation has increased costs for these firms without a corresponding rise in Medicare reimbursements. He prefers companies that have growing demand and strong cash flow.

Yoon points out that the recent boost in health care stocks is encouraging following a tough year after the last election, when health care shares fell 10% while the S&P 500 rose. He believes the market is expanding and this could positively affect the sector.

There has been significant innovation in health care, with many companies that previously posted losses now turning profitable. Yoon argues that this change could drive stock prices up and has largely gone unnoticed by investors.

Since taking the helm in 2008, Yoon has achieved a 12.5% annualized return, surpassing both the typical health fund and the S&P 500. This resilience could signify a brighter future for health care stocks.

According to a recent survey, 73% of investors trust health care as a long-term investment strategy. This trend suggests a growing confidence in the sector’s ability to rebound and adapt amidst challenges.

For more insights, you can check resources like the Healthcare IT News for updates on health care innovations and investment strategies.

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