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Is Hartford Healthcare Fund HLS IB (HBGHX) a Strong Mutual Fund Pick Right Now?

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If you've been stuck searching for Sector - Health funds, consider Hartford Healthcare Fund HLS IB (HBGHX - Free Report) as a possibility. HBGHX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes HBGHX 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

Hartford is based in Woodbury, MN, and is the manager of HBGHX. Hartford Healthcare Fund HLS IB debuted in October of 2002. Since then, HBGHX has accumulated assets of about $37.72 million, according to the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 7.16%, 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 9.48%, 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. HBGHX's standard deviation over the past three years is 15.51% compared to the category average of 13.54%. Over the past 5 years, the standard deviation of the fund is 16.67% compared to the category average of 14.04%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, HBGHX lost 37.18% and underperformed its peer group by 3%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.

Nevertheless, with a 5-year beta of 1.06, the fund is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -1.81. 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, HBGHX is a no load fund. It has an expense ratio of 1.16% compared to the category average of 1.36%. From a cost perspective, HBGHX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, Hartford Healthcare Fund HLS IB ( HBGHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Sector - Health, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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