One of the top performing funds in the Health Care objective group, Franklin Biotechnology Discovery Fund (FBDIX) is a highly focused way to invest in the future development of the health care space. Although it is a load fund with a fairly high expense ratio, it often finds itself at the top of the performance pack. That said, year-to-year share price fluctuations suggest that the fund isn’t for the faint of heart.

Funds in Value Line’s Growth/Income objective group place equal emphasis on capital growth and current income, or growth of income, mainly through investments in common stocks.  Although this balanced description may seem like a fine line of distinction from a fund that seeks capital appreciation with a secondary objective of income, or a fund that seeks income with a secondary objective of capital growth, it indicates an important difference.  Funds in the Growth objective group and the Income objective group both have specific first-tier goals—Growth/Income funds, meanwhile, are, in some ways, the midpoint point between the other two. 

Fidelity Magellan Fund (FMAGX) seeks capital appreciation by investing in both domestic and foreign common stocks. It invests in both growth and value issues using fundamental analysis to account for each company’s financial position and competitive stance, as well as broader market and competitive conditions. Harry Lange, who joined Fidelity in 1987, has been the lead manager of Magellan Fund since October 31, 2005.   

Value Line’s Health objective group is a fairly small, yet surprisingly diverse, collection of mutual funds. Clearly, the funds in this category invest the vast majority of their assets in healthcare and related businesses.  That said, there are a number of different variants within what would seem an otherwise narrow space.  The two biggest areas of differentiation are biotechnology and general healthcare funds.

T. Rowe Price Health Sciences Fund (PRHSX) takes direct aim at the health care sector, looking to generate long-term capital appreciation via investing in what the manager believes to be some of the fastest growing segments of the American economy: pharmaceuticals, healthcare services, product and device makers, and biotechnology.  Manager Kris Jenner, who has been at the helm since early 2000, believes that the healthcare field is particularly attractive these days

Needham Growth Fund’s stated objective is long-term capital appreciation. Generally speaking, management attempts to invest in companies with above-average long-term growth rates at reasonable valuations—often referred to as growth at a reasonable price or GARP.  The fund is best suited for investors with above-average risk tolerance levels, as it invests a material percentage of its assets in the micro- to mid-cap range.

Listed below are 15 of the largest funds in our 19,000+ Mutual Fund database.  Their total assets account for about 10% of the assets of all the funds we follow.  As such, many investors are affected by how these funds perform.  While their one-year returns are sharply higher than their five-year returns, the past three months ending June 30, 2010 show an almost uniform weakness.  Are we in a new market correction or is this a pause in a stock recovery?  Surely, the debt crisis in Europe and worries of slower growth in Asia provided reasons for investors to sell.

Target-date mutual funds have been the subject of much scrutiny over the past weeks and months. These funds are generally meant to be the sole holding for an investor, providing a diversified mix of assets that change over time, becoming more conservative as the “target date” draws near. In general, the “target date” is expected to be the investor’s retirement date. The general logic of these offerings is to do for investors what they may not be able to do for themselves—provide diversification/asset allocation and a structured investment program that changes (becomes more conservative) as the investor ages.