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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 carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that VGHAX is a Sector - Health fund, and this area is also loaded with various options. Sector - Health mutual funds give investors an opportunity to focus on one of the largest sectors of the American economy, healthcare. Funds in this category 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 more than $37.45 billion in assets. The fund is currently managed by Jean M. Hynes who has been in charge of the fund since May of 2008.
Performance
Of course, investors look for strong performance in funds. This fund in particular 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. Compared to the category average of 12.91%, the standard deviation of VGHAX over the past three years is 13.09%. The standard deviation of the fund 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 cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. VGHAX lost 31.77% in the most recent bear market and outperformed its peer group by 1.08%. This could mean that the fund is a better choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.9, which means it is hypothetically less volatile than the market at large. 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. Over the past 5 years, the fund has a positive alpha of 0.72. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 96.66% of its assets in stocks, and these companies have an average market capitalization of $72.05 billion. The fund has the heaviest exposure to the following market sectors:
Health
Finance
Other
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. 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%. Looking at the fund from a cost perspective, VGHAX is actually cheaper than its peers.
This fund requires a minimum initial investment of $50,000, and each subsequent investment should be at least $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, this fund 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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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 carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that VGHAX is a Sector - Health fund, and this area is also loaded with various options. Sector - Health mutual funds give investors an opportunity to focus on one of the largest sectors of the American economy, healthcare. Funds in this category 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 more than $37.45 billion in assets. The fund is currently managed by Jean M. Hynes who has been in charge of the fund since May of 2008.
Performance
Of course, investors look for strong performance in funds. This fund in particular 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. Compared to the category average of 12.91%, the standard deviation of VGHAX over the past three years is 13.09%. The standard deviation of the fund 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 cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. VGHAX lost 31.77% in the most recent bear market and outperformed its peer group by 1.08%. This could mean that the fund is a better choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.9, which means it is hypothetically less volatile than the market at large. 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. Over the past 5 years, the fund has a positive alpha of 0.72. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 96.66% of its assets in stocks, and these companies have an average market capitalization of $72.05 billion. The fund has the heaviest exposure to the following market sectors:
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. 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%. Looking at the fund from a cost perspective, VGHAX is actually cheaper than its peers.
This fund requires a minimum initial investment of $50,000, and each subsequent investment should be at least $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, this fund 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.