The healthcare sector is one of the most desirable avenues for parking investments when markets are headed south. The demand for such services usually remains unchanged even during an economic downturn and investments in the sector provide sufficient protection to the capital invested. Several pharmaceutical companies also provide regular dividends, which can help mitigate losses from falling share prices. Healthcare mutual funds provide the perfect avenue for investors looking to invest in this sector.

Below we will share with you 5 favorably ranked healthcare mutual funds. Each has earned either a Zacks #1 Rank (Strong Buy) or a Zacks #2 Rank (Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all healthcare funds, investors can click here to see the complete list of funds.

T. Rowe Price Health Sciences (PRHSX – MF report) seeks capital growth over the long run. The fund invests the majority of its assets in common stocks of companies whose primary operations are related to health sciences. The fund focuses on investing in large and mid-cap firms. It may also invest in non U.S. securities. The fund has a three year annualized return of 38.3%.

Taymour R. Tamaddon is the fund manager and has managed this healthcare mutual fund since 2013.

Prudential Jennison Health Sciences A (PHLAX – MF report) invests a lion's share of its assets in companies from healthcare domain. The fund invests its assets in companies located across different countries including the U.S. The fund may also consider the initial public offering (IPO) market for potential investment and may allocate excess of 5% of its assets in a particular company. The non-diversified fund has a three year annualized return of 38.4%.

The fund has an expense ratio of 1.15% as compared to category average of 1.43%.

(FSMEX – MF report) seeks long term capital growth. It invests a major portion of its assets in companies that are primarily involved in medical equipment and devices and related technologies sector. It focuses on acquiring common stocks of companies by analyzing factors including financial strength and economic condition. The fund invests in both US and non-US companies. The non-diversified fund has a three year annualized return of 26.4%.