With tech stocks like Apple, Nvidia, Alphabet and Microsoft still out of favor, medical stocks lead the latest list of new buys by the best mutual funds. Oil stocks, food companies and defense contractors also secure prominent spots on this month's screen.
Led by UnitedHealth, Vertex Pharmaceuticals and Pfizer, 15 stocks — including eight from the medical sector — each took in over $100 million in new investments from these top money managers. Merck, Bristol Myers Squibb, Eli Lilly, Anthem and AbbVie also achieved that feat.
Among oil stocks and other energy sector plays, the best mutual funds placed similarly large bets on Pioneer Natural Resources, Baker Hughes and ConocoPhillips.
Among defense stocks, only Lockheed Martin secured a spot in the $100-million club, taking in an estimated $118 million.
Big Mac purveyor McDonald's also found a spot at that exclusive table, gobbling down $168 million from the best mutual funds.
Note: Be sure to check these Excel files, updated and published each month, to see all the stocks on the latest list of new buys and list of new sells by the best mutual funds.
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Best Mutual Funds Favor Biotech, Big Pharma Over Tech Titans — Again
In recent months as the bear market sunk its claws into tech stocks, AAPL, NVDA, MSFT and GOOGL have all vanished from this monthly report on new buys by the best mutual funds. By the June report, even Apple — the sole survivor among the titans of tech in May — fell off the list. With signs of sector rotation in full bloom, institutional investors have shifted their focus to the medical, defense and chemical sectors.
Within the medical sector, pharmaceuticals and biotechs, as well as other health care stocks, dominate. In addition to companies like Pfizer, Vertex and Merck, top funds have been scooping up shares in AstraZeneca, CVS Health, Amgen, Cigna and Humana.
Where Else Are The Best Mutual Funds Investing?
While the shift away from tech and into medical stocks is clear, leading money managers continue to invest substantial sums into other sectors as well.
In addition to Lockheed, funds have also flowed into defense and aerospace firms L3Harris Technologies and AAR as the Russia-Ukraine conflict and tensions with China and Iran continue.
Confirmed by the decline in the Energy Select Sectors SPDR ETF, energy stocks have come off their highs. Yet in addition to COP, BKR and PXD stock, top money managers have drilled for shares in EOG Resources, Matador Resources, Diamondback Energy, Northern Oil & Gas and other oil stocks.
More food for investors' thoughts also comes via buys by the best mutual funds in names like General Mills, Simply Good Foods, Hershey, Tyson Foods and Archer Daniels Midland.
Retailer stocks from a wide range of industry groups also make this list. Among auto dealers, the best mutual funds have invested in AutoNation, Penske and Asbury Automotive Group. Auto parts retailers AutoZone, O'Reilly Automotive, LKQ and Genuine Parts all found a place on the shelf.
Plus, the best mutual funds also added discount retailers Dollar Tree and BJ's Wholesale Club to their shopping carts.
Bases, Breakouts And Buy Zones To Watch
As market volatility continues, there is no shortage of bases, breakouts and buy zones among the new buys by the best mutual funds.
Privia Health, Meridian Bioscience and Harmony Biosciences have all flashed recent breakouts. Harmony Biosciences has also earned a spot on both the IBD 50 and IPO Leaders.
Stocks working on new chart patterns or testing new buy points and buy zones include Dollar Tree and Parsons, just to name two. After its most recent breakout, Vertex is now extended from its recent buy point, as is Corcept Therapeutics.
MCD stock is working on a consolidation as it looks to hold support at its 10-week moving average. The fast food leader's relative strength line is already at a new high.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
