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Is Vanguard Health Care Investor (VGHCX) a Strong Mutual Fund Pick Right Now?
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Looking for a Sector - Health fund? You may want to consider Vanguard Health Care Investor (VGHCX - Free Report) as a possible option. VGHCX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that VGHCX 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
Vanguard Group is based in Malvern, PA, and is the manager of VGHCX. Vanguard Health Care Investor made its debut in May of 1984, and since then, VGHCX has accumulated about $8.45 billion in assets, per the most up-to-date date available. 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 7.74%, and it sits 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 6.98%, 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. VGHCX's standard deviation over the past three years is 14.4% compared to the category average of 13.24%. Over the past 5 years, the standard deviation of the fund is 13.63% compared to the category average of 13.55%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In VGHCX's case, the fund lost 31.82% in the most recent bear market and outperformed its peer group by 1%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 0.86, so investors should note that it is hypothetically less volatile than the market at large. 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. The fund has produced a negative alpha over the past 5 years of -1.12, which shows that 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, VGHCX is a no load fund. It has an expense ratio of 0.34% compared to the category average of 1.28%. From a cost perspective, VGHCX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Health Care Investor ( VGHCX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Health Care Investor ( VGHCX ) looks like a somewhat average choice for investors right now.
Want even more information about VGHCX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.
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Is Vanguard Health Care Investor (VGHCX) a Strong Mutual Fund Pick Right Now?
Looking for a Sector - Health fund? You may want to consider Vanguard Health Care Investor (VGHCX - Free Report) as a possible option. VGHCX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that VGHCX 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
Vanguard Group is based in Malvern, PA, and is the manager of VGHCX. Vanguard Health Care Investor made its debut in May of 1984, and since then, VGHCX has accumulated about $8.45 billion in assets, per the most up-to-date date available. 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 7.74%, and it sits 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 6.98%, 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. VGHCX's standard deviation over the past three years is 14.4% compared to the category average of 13.24%. Over the past 5 years, the standard deviation of the fund is 13.63% compared to the category average of 13.55%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In VGHCX's case, the fund lost 31.82% in the most recent bear market and outperformed its peer group by 1%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 0.86, so investors should note that it is hypothetically less volatile than the market at large. 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. The fund has produced a negative alpha over the past 5 years of -1.12, which shows that 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, VGHCX is a no load fund. It has an expense ratio of 0.34% compared to the category average of 1.28%. From a cost perspective, VGHCX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Health Care Investor ( VGHCX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Health Care Investor ( VGHCX ) looks like a somewhat average choice for investors right now.
Want even more information about VGHCX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.