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Is T. Rowe Price Health Sciences (PRHSX) a Strong Mutual Fund Pick Right Now?

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Have you been searching for a Sector - Health fund? You might want to begin with T. Rowe Price Health Sciences (PRHSX - Free Report) . PRHSX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Sector - Health funds is an area filled with options, such as PRHSX. Healthcare is one of the biggest sectors of the American economy, and Sector - Health mutual funds provide a great opportunity to invest in this industry. Here, funds can include everything from for-profit hospitals to pharmaceutical companies and medical device manufacturers.

History of Fund/Manager

T. Rowe Price is based in Baltimore, MD, and is the manager of PRHSX. Since T. Rowe Price Health Sciences made its debut in December of 1995, PRHSX has garnered more than $9.81 billion in assets. The fund is currently managed by Ziad Bakri who has been in charge of the fund since April of 2016.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 11.49%, and is in the top 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 0.83%, which places it in the middle third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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. Compared to the category average of 15.74%, the standard deviation of PRHSX over the past three years is 15.61%. Looking at the past 5 years, the fund's standard deviation is 17.54% compared to the category average of 16.77%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. PRHSX has a 5-year beta of 0.75, which means it is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -0.24, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, PRHSX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 1.04%. From a cost perspective, PRHSX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, T. Rowe Price Health Sciences ( PRHSX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

Your research on the Sector - Health segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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