Dallas-based Highland Funds' Highland Long/Short Healthcare Fund this week received a five-star rating from Morningstar which ranks the mutual fund among the top 10% of funds in the healthcare category.

The announcement came as the fund reached the three-year milestone required by Morningstar to be considered for the five-star distinction.

Highland Long/Short Healthcare mutual fund invests at least 80% of its total asset value in securities of healthcare companies and has three share classes: A, C and Z (tickers HHCAX, HHCCX and HHCZX).

The fund is sub-advised by Cummings Bay Capital Management, L.P.

"We continue to see winners and losers created by the biggest structural change to the healthcare sector in more than 45 years," said Michael Gregory,  Highland Long/Short Healthcare Fund portfolio manager. "A long/short strategy seeks to take advantage of both sides of these regulatory changes."

In addition to the Highland Long/Short Healthcare Fund, Highland Funds advises 14 other Morningstar-rated funds.