3 Funds Vulnerable to a Growth Meltdown
These funds have hefty exposure to healthcare and tech stocks.
A version of this article was published in the June 2016 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor here.
Since the start of the bull market in early 2009 through December 2015, technology and healthcare stocks helped fuel the typical growth fund's edge over blend and value funds. The Morningstar Healthcare Sector Index and the Morningstar Technology Sector Index returned 22.1% and 21.4%, respectively, compared with the S&P 500's return of 20.0% during the same period. But 2016 has shaken things up: Technology and healthcare stocks are nearly flat for the year to date, with some big names posting losses for the first time in years. Not surprisingly, funds with outsize stakes to these sectors have also dipped.
Susan Wasserman does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.