Virtual Funds: Healthcare Fund's Ranking/Performance in Q3 '08 and Overall

Among all the sectors, healthcare has held up better than most. Of course, now, with the benefit of hindsight, various pundits and talking heads are pointing out that this is the safe haven with a lot of growth potential. What's the logic here? Since this sector has lost the least, it must grow the most now? Nonsense. If anything, now is probably not the time to invest in the healthcare considering the significance of upside potential in other, very beaten-down sectors. If you're nevertheless curious about what has done relatively well so far, here I will detail the performance of the virtual mutual fund I've set up for the Healthcare sector on the Marketocracy web site.

Orange line in the chart below shows how my Healthcare Fund has performed relative to the m100 (a collective Marketocracy fund that uses picks from the top 100 members), S&P 500, Dow Jones Index, and Nasdaq.

Below is this fund's ranking:

Thanks to the very strong performance in the 3rd quarter, this fund is now highly ranked in the 6-months and 1-year periods. But then again, in the current market environment it's not about winning the most, but rather about losing the least. I do think that healthcare will do well in the 4th quarter after the presidential elections are over with. Markets hate uncertainty more than bad news and discount healthcare stocks accordingly. Once some of the uncertainty goes away, so will the discount on these stocks.

Here is a list of all the stocks currently in the fund and how they've performed up to this point:

I have not changed the picks since the fund's inception, so the turnover is non-existent. I expect to add to my positions in several of these stocks since I still have $236K of Cash in this fund. Below are brief profiles of these stocks. I intend to post more details and expectations for this fund's holdings as well as for my other funds.

Barr Pharmaceuticals (BRL) - Develops, manufactures, and sells generic and branded drugs through operating subsidiaries Barr Laboratories and Duramed Pharmaceuticals. Including Pliva, its product portfolio contains hundreds of generics and 25 proprietary pharmaceutical products. Barr acquired FEI Women's Health in November 2005 and Pliva in 2006. (Source: Morningstar)

Amgen (AMG) - A leader in biotechnology-based human therapeutics, with historical expertise in renal disease and cancer supportive care products. Flagship drugs include red blood cell boosters Epogen and Aranesp, immune system boosters Neupogen and Neulasta, and Enbrel for inflammatory diseases. Amgen introduced its first cancer therapeutic, Vectibix, in 2006, and late-stage development efforts range from osteoporosis treatments to cancer antibodies. (Source: Morningstar)

Johnson & Johnson (JNJ) - Ranks as the world's largest and most diverse health-care company. The company comprises three divisions: pharmaceutical, medical devices and diagnostics, and consumer. While the pharmaceutical division currently represents 40% of total sales, we expect patent losses to reduce this proportion to 30% over the next 10 years, with the remaining divisions picking up equal share. (Source: Morningstar)

Novartis (NVS) - Develops and manufactures health-care products within its four main operating segments, including branded pharmaceuticals, generic pharmaceuticals, diagnostic and vaccines, and consumer products. (Source: Morningstar)

Quest Diagnostics (DGX) - Leading independent provider of diagnostic testing, information, and services in the U.S. The company generates more than 90% of its revenue through clinical testing, anatomic pathology, esoteric testing, and substance abuse testing at its national network of 2,100 patient service centers. The firm also provides clinical trials testing, risk assessment services, and information technology solutions. (Source: Morningstar)

McKesson (MCK) - Leading distributor of pharmaceuticals, specialty drugs, medical and surgical supplies, and health and beauty care products in North America. McKesson's Technology Solutions segment provides software related to pharmacy services, medical records, patient care, and financial management. (Source: Morningstar)

Pfizer (PFE) - World's largest pharmaceutical firm, with annual sales near $50 billion. After the sale of its consumer health-care division to J&J, prescription drugs now account for more than 90% of sales. Top sellers include cholesterol-lowering Lipitor, Celebrex for arthritis, Viagra for impotence, and Lyrica for epilepsy and some types of neuropathic pain. Recently approved drugs with blockbuster potential include oncology drug Sutent and Chantix for smoking cessation. (Source: Morningstar)

GlaxoSmithKline (GSK) - Within the pharmaceutical industry, GlaxoSmithKline ranks second only to Pfizer in market capitalization. The company wields its might across multiple therapeutic classes, including cardiovascular, metabolic, respiratory, neurological, and antiviral, as well as vaccines and consumer products. Prescription drug and vaccine sales account for more than 85% of total sales. (Source: Morningstar)

Medtronic (MDT) - One of the largest medical device companies, Medtronic develops and manufactures therapeutic medical devices for chronic diseases. Its implantable products include pacemakers, defibrillators, heart valves, stents, insulin pumps, and artificial spinal discs. The company markets its products to health-care institutions and physicians in the United States and overseas. Foreign sales account for about 38% of the company's total sales. (Source: Morningstar)

Hospira (HSP) - One of the largest global specialty pharmaceutical and medication-delivery companies. It offers generic injectable drugs primarily to U.S. hospitals, integrated medication-delivery systems that provide infusion therapy and pain management, and contract-manufacturing services to biopharmaceutical companies. Hospira was spun off from Abbott Laboratories in April 2004 and purchased Mayne Pharma for $2 billion in February 2007. (Source: Morningstar)

UnitedHealth Group (UNH) - Provides health insurance and related services to about 70 million Americans. Products include risk-based health insurance, non-risk-based plan management for self-insured employers, Medicare Advantage, Medicaid, and SCHIP programs, pharmacy benefit and disease management, and database and consulting services. (Source: Morningstar)