Any investors hoping to find a Sector - Health fund might consider looking past Delaware Healthcare A (DLHAX Quick QuoteDLHAX - Free Report) . DLHAX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes DLHAX as Sector - Health, a segment packed with options. Sector - Health mutual funds offer investors a focus on the healthcare industry, one of the largest sectors in the American economy. These funds can include everything from pharmaceutical companies to medical device manufacturers and for-profit hospitals.

History of Fund/Manager

Delaware Investments is based in Philadelphia, PA, and is the manager of DLHAX. Delaware Healthcare A made its debut in September of 2007, and since then, DLHAX has accumulated about $346.02 million in assets, per the most up-to-date date available. The fund is currently managed by Liu Er Chen who has been in charge of the fund since September of 2007.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 14.08%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.19%, 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. Over the past three years, DLHAX's standard deviation comes in at 18.83%, compared to the category average of 16.01%. Looking at the past 5 years, the fund's standard deviation is 15.83% compared to the category average of 13.56%. 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. DLHAX has a 5-year beta of 0.82, which means it is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a negative alpha of -0.3. This means 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, DLHAX is a load fund. It has an expense ratio of 1.23% compared to the category average of 1.32%. Looking at the fund from a cost perspective, DLHAX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $100.

Bottom Line

Overall, Delaware Healthcare A ( DLHAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Delaware Healthcare A ( DLHAX ) looks like a somewhat weak choice for investors right now.

For additional information on the Sector - Health area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into DLHAX too 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.