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Is Vanguard Health Care Adm (VGHAX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Sector - Health funds, you might want to consider passing on by Vanguard Health Care Admiral (VGHAX - Free Report) as a possibility. VGHAX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Sector - Health funds is an area filled with options, such as VGHAX. 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
VGHAX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard Health Care Admiral made its debut in November of 2001, VGHAX has garnered around $47.59 billion in assets. Jean M. Hynes is the fund's current manager and has held that role since May of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 14.04%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 2.26%, which places it in the bottom 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. VGHAX's standard deviation over the past three years is 13.09% compared to the category average of 12.91%. The fund's standard deviation over the past 5 years is 12.45% compared to the category average of 16.21%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. VGHAX lost 31.77% in the most recent bear market and outperformed its peer group by 1.08%. This might suggest that the fund is a better choice than its peers during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VGHAX has a 5-year beta of 0.9, which means it 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. With a positive alpha of 0.72, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining 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 principally on equities that are traded in the United States.
The mutual fund currently has 96.58% of its holdings in stocks, with an average market capitalization of $72.05 billion. The fund has the heaviest exposure to the following market sectors:
Health
Finance
Other
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, VGHAX is a no load fund. It has an expense ratio of 0.33% compared to the category average of 1.34%. VGHAX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $50,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard Health Care Admiral VGHAX has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Vanguard Health Care Admiral VGHAX looks like a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Sector - Health, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is Vanguard Health Care Adm (VGHAX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Sector - Health funds, you might want to consider passing on by Vanguard Health Care Admiral (VGHAX - Free Report) as a possibility. VGHAX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Sector - Health funds is an area filled with options, such as VGHAX. 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
VGHAX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard Health Care Admiral made its debut in November of 2001, VGHAX has garnered around $47.59 billion in assets. Jean M. Hynes is the fund's current manager and has held that role since May of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 14.04%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 2.26%, which places it in the bottom 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. VGHAX's standard deviation over the past three years is 13.09% compared to the category average of 12.91%. The fund's standard deviation over the past 5 years is 12.45% compared to the category average of 16.21%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. VGHAX lost 31.77% in the most recent bear market and outperformed its peer group by 1.08%. This might suggest that the fund is a better choice than its peers during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VGHAX has a 5-year beta of 0.9, which means it 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. With a positive alpha of 0.72, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining 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 principally on equities that are traded in the United States.
The mutual fund currently has 96.58% of its holdings in stocks, with an average market capitalization of $72.05 billion. The fund has the heaviest exposure to the following market sectors:
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, VGHAX is a no load fund. It has an expense ratio of 0.33% compared to the category average of 1.34%. VGHAX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $50,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard Health Care Admiral VGHAX has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Vanguard Health Care Admiral VGHAX looks like a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Sector - Health, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.