If you’ve been stuck searching for Sector – Health funds, consider Vanguard Health Care Index Admiral (VHCIX) as a possibility. The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
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 $2.88 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.
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 14.96%, and is in the top 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 16.78%, 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. VHCIX’s standard deviation over the past three years is 16.47% compared to the category average of 16.7%. The standard deviation of the fund over the past 5 years is 14.54% compared to the category average of 13.94%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 0.8, which means it is hypothetically less volatile than the market at large. 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. The fund has produced a positive alpha over the past 5 years of 1.05, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, VHCIX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.32%. So, VHCIX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $100,000 and that each subsequent investment needs to be at $1.
This could just be the start of your research on VHCIXin the Sector – Health category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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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