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Is Vanguard Health Care Investor (VGHCX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Sector - Health fund? Well, Vanguard Health Care Investor (VGHCX - Free Report) would not be a good potential starting point right now. VGHCX carries 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 VGHCX. 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
Vanguard Group is responsible for VGHCX, and the company is based out of Malvern, PA. Vanguard Health Care Investor made its debut in May of 1984, and since then, VGHCX has accumulated about $9.44 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. VGHCX has a 5-year annualized total return of 13.25% 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 3.25%, 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. The standard deviation of VGHCX over the past three years is 13.01% compared to the category average of 13.01%. Looking at the past 5 years, the fund's standard deviation is 12.08% compared to the category average of 12.46%. This makes the fund less 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 underperformed its peer group by 1.06%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 0.86, the fund 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. VGHCX's 5-year performance has produced a positive alpha of 2.1, which means 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, VGHCX is a no load fund. It has an expense ratio of 0.38% compared to the category average of 1.31%. From a cost perspective, VGHCX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Health Care Investor has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Health Care Investor looks like a somewhat weak choice for investors right now.
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 VGHCX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Vanguard Health Care Investor (VGHCX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Health fund? Well, Vanguard Health Care Investor (VGHCX - Free Report) would not be a good potential starting point right now. VGHCX carries 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 VGHCX. 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
Vanguard Group is responsible for VGHCX, and the company is based out of Malvern, PA. Vanguard Health Care Investor made its debut in May of 1984, and since then, VGHCX has accumulated about $9.44 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. VGHCX has a 5-year annualized total return of 13.25% 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 3.25%, 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. The standard deviation of VGHCX over the past three years is 13.01% compared to the category average of 13.01%. Looking at the past 5 years, the fund's standard deviation is 12.08% compared to the category average of 12.46%. This makes the fund less 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 underperformed its peer group by 1.06%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 0.86, the fund 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. VGHCX's 5-year performance has produced a positive alpha of 2.1, which means 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, VGHCX is a no load fund. It has an expense ratio of 0.38% compared to the category average of 1.31%. From a cost perspective, VGHCX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Health Care Investor has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Health Care Investor looks like a somewhat weak choice for investors right now.
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 VGHCX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.