Investors in search of a Sector - Health fund might want to consider looking at Vanguard Health Care Index Admiral (VHCIX Quick QuoteVHCIX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.

Objective

Zacks categorizes VHCIX 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

Vanguard Group is based in Malvern, PA, and is the manager of VHCIX. Vanguard Health Care Index Admiral debuted in January of 2004. Since then, VHCIX has accumulated assets of about $2.74 billion, according to the most recently available information. The fund's current manager, Walter Nejman, has been in charge of the fund since December of 2015.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 9.19%, and is 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 4.83%, which places it in the middle third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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. The standard deviation of VHCIX over the past three years is 14.06% compared to the category average of 16.3%. Looking at the past 5 years, the fund's standard deviation is 15.62% compared to the category average of 17.84%. This makes the fund less 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. VHCIX has a 5-year beta of 0.71, 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. VHCIX has generated a negative alpha over the past five years of -1.92, demonstrating that managers in this portfolio find it difficult to pick 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, VHCIX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.11%. Looking at the fund from a cost perspective, VHCIX is actually cheaper than its peers.

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

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Don't stop here for your research on Sector - Health funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VHCIX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.