A Gizmo Boost for Health Care?
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Some areas of health care have been held down by the specter of government regulation and fewer blockbuster drugs. However, several new developments, most notably in medical devices, look promising, says Steve Calhoun, manager of the $1.75 billion Fidelity Select Health Care Fund (FSPHX ). Calhoun sees great potential for drug-coated stents, which he says should soon receive the green light from the Food & Drug Administration. Calhoun predicts that these artery-opening devices will spur growth for several companies, including Johnson & Johnson (JNJ ) and Boston Scientific (BSX ). In a challenging environment, he thinks such attractive innovations offer the best prospects in the health-care sector. Calhoun, who took over the Fidelity fund a year ago, has managed to avoid the steeper declines that have plagued his peers. For the one-year period through February, the fund fell 16.1%, vs. a 24.3% loss for the average health-care fund. Calhoun’s record so far continues the fund’s history of outperforming. Among all domestic equity funds, its the fifth-best-performing fund for the 10-year period through February, with a 15.3% annualized gain. Calhoun credits this success to Fidelity’s strengths in investment research. Based on risk and returns over the last three years, S&P gives the portfolio an overall rank of 3 Stars. Bill Gerdes of S&P’s Fund Advisor recently spoke with Calhoun about investing in the sector and the fund’s strategy. Edited excerpts from their conversation follow: More : businessweek.com |