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Is BlackRock Health Sciences Opportunities A (SHSAX) a Strong Mutual Fund Pick Right Now?

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Have you been searching for a Sector - Health fund? You might want to begin with BlackRock Health Sciences Opportunities A (SHSAX - Free Report) . SHSAX bears a Zacks Mutual Fund Rank of 3 (Hold), 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 SHSAX. 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

SHSAX finds itself in the BlackRock family, based out of New York, NY. BlackRock Health Sciences Opportunities A made its debut in October of 2002, and since then, SHSAX has accumulated about $2.69 billion in assets, per the most up-to-date date available. The fund's current manager, Erin Xie, has been in charge of the fund since July of 2003.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 19.2%, and is in the middle 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 10.74%, 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. Compared to the category average of 10.30%, the standard deviation of SHSAX over the past three years is 14.27%. The fund's standard deviation over the past 5 years is 13.39% compared to the category average of 16.74%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. SHSAX lost 26.57% in the most recent bear market and outperformed its peer group by 6.3%. This might suggest that the fund is a better choice than its peers during a bear market.

Nevertheless, investors should also note that the fund has a 5-year beta of 0.98, which means it is hypothetically as volatile as the market at large. 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 positive alpha of 3.67. This means that managers in this portfolio are skilled in picking 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, SHSAX is a load fund. It has an expense ratio of 1.17% compared to the category average of 1.31%. SHSAX is actually more expensive than its peers when you consider factors like cost.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.

Bottom Line

Overall, BlackRock Health Sciences Opportunities A has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a somewhat average choice for investors right now.

Want even more information about SHSAX? 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. 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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