Is Vanguard Health Care Investor (VGHCX) a Strong Mutual Fund Pick Right Now?

Sector – Health fund seekers should consider taking a look at Vanguard Health Care Investor (VGHCX). VGHCX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

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.

Vanguard Group is responsible for VGHCX, and the company is based out of Malvern, PA. Since Vanguard Health Care Investor made its debut in May of 1984, VGHCX has garnered more than $5.75 billion in assets. Rebecca Sykes is the fund’s current manager and has held that role since May of 2023.

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 6.33%, 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 6.87%, which places it in the bottom 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. Over the past three years, VGHCX’s standard deviation comes in at 13.52%, compared to the category average of 13.57%. The standard deviation of the fund over the past 5 years is 13.81% compared to the category average of 14.68%. This makes the fund less volatile than its peers over the past half-decade.

Investors should note that the fund has a 5-year beta of 0.57, so it is likely going to be less volatile than the market at large. 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. The fund has produced a negative alpha over the past 5 years of -2.99, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.