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I believe that now is the time to go back into this sector as it showing signs of recovery and valuations are reasonable. Investor confidence has started returning, with a majority of companies’ second-quarter earnings being above expectations. In July, there was a positive inflow into this sector which was the biggest seen since May 2005. The two funds I like best are Schroder medical discovery fund managed by John Bowler and the Axa Framlington health fund managed by Dr Deane Donnigan. The The Schroder fund has around 45 per cent invested in pharmaceuticals, 23 per cent invested in healthcare, equipment and supplies, 21 per cent in healthcare providers and services and around 11 per cent in biotechnology. Axa Framlington is invested in around 28 per cent in devices, 25 per cent in biotechnology products, 22 per cent in healthcare services, 12 per cent in speciality pharmaceuticals and the balance spread among other sectors. The Schroder fund is spread between different countries, with 50 per cent in the US, 19 per cent in the UK, 17 per cent in Switzerland, 12 per cent in other European countries and 2 per cent in Japan. The Axa Framlington Health fund has around 78 per cent invested in the US, 8 per cent in Europe excluding the UK, 8 per cent in the UK and 3 per cent in Japan, with the balance spread elsewhere. I advise that all bigger equity growth portfolios should hold a fairly substantial percentage of their assets in both funds.