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Is Vanguard Health Care Administrative (VGHAX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Sector - Health fund? Well, Vanguard Health Care Administrative (VGHAX - Free Report) would not be a good potential starting point right now. VGHAX has 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. Vanguard Health Care Administrative debuted in November of 2001. Since then, VGHAX has accumulated assets of about $40.36 billion, according to the most recently available information. The fund is currently managed by Jean M. Hynes who has been in charge of the fund since May of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VGHAX has a 5-year annualized total return of 14.87% and it sits in the top 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 7.06%, which places it in the top 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 12.73% compared to the category average of 13.01%. The fund's standard deviation over the past 5 years is 12.1% compared to the category average of 12.46%. 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. In the most recent bear market, VGHAX lost 31.76% and underperformed its peer group by 1.12%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
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 0.87, 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. VGHAX has generated a positive alpha over the past five years of 2.33, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 1.31%. Looking at the fund from a cost perspective, VGHAX is actually cheaper than its peers.
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 Administrative ( VGHAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is Vanguard Health Care Administrative (VGHAX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Health fund? Well, Vanguard Health Care Administrative (VGHAX - Free Report) would not be a good potential starting point right now. VGHAX has 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. Vanguard Health Care Administrative debuted in November of 2001. Since then, VGHAX has accumulated assets of about $40.36 billion, according to the most recently available information. The fund is currently managed by Jean M. Hynes who has been in charge of the fund since May of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VGHAX has a 5-year annualized total return of 14.87% and it sits in the top 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 7.06%, which places it in the top 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 12.73% compared to the category average of 13.01%. The fund's standard deviation over the past 5 years is 12.1% compared to the category average of 12.46%. 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. In the most recent bear market, VGHAX lost 31.76% and underperformed its peer group by 1.12%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
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 0.87, 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. VGHAX has generated a positive alpha over the past five years of 2.33, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 1.31%. Looking at the fund from a cost perspective, VGHAX is actually cheaper than its peers.
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 Administrative ( VGHAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.