There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Health Care Investor (VGHCX Quick QuoteVGHCX - Free Report) . VGHCX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

VGHCX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Health Care Investor debuted in May of 1984. Since then, VGHCX has accumulated assets of about $7.54 billion, according to the most recently available information. Jean M. Hynes is the fund's current manager and has held that role since May of 2008.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 9.63%, and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 8.4%, which places it in the middle third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. VGHCX's standard deviation over the past three years is 15.61% compared to the category average of 18.19%. Over the past 5 years, the standard deviation of the fund is 15.66% compared to the category average of 16.95%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.68, the fund is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. VGHCX's 5-year performance has produced a positive alpha of 2.75, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is largely on equities that are traded in the United States.

Right now, 75.75% of this mutual fund's holdings are stocks, with an average market capitalization of $155.77 billion. The fund has the heaviest exposure to the following market sectors:

• Health
• Finance
• Other

This fund's turnover is about 15%, so the fund managers are making fewer trades than its comparable peers.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VGHCX is a no load fund. It has an expense ratio of 0.32% compared to the category average of 1.29%. So, VGHCX is actually cheaper than its peers from a cost perspective.

Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.

Bottom Line

Overall, Vanguard Health Care Investor ( VGHCX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Health Care Investor ( VGHCX ) looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.