Looking for a Sector – Health fund? You may want to consider Vanguard Health Care Index Admiral (VHCIX) as a possible option. VHCIX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
The world of Sector – Health funds is an area filled with options, such as VHCIX. 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 based in Malvern, PA, and is the manager of VHCIX. The Vanguard Health Care Index Admiral made its debut in January of 2004 and VHCIX has managed to accumulate roughly $2.74 billion in assets, as of the most recently available information. The fund’s current manager, Kenny Narzikul, has been in charge of the fund since February of 2025.
Performance
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 5.58%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 11.08%, which places it in the middle 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. Compared to the category average of 16.34%, the standard deviation of VHCIX over the past three years is 14.59%. Looking at the past 5 years, the fund’s standard deviation is 14.99% compared to the category average of 16.8%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.6, which means it is hypothetically 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. VHCIX has generated a negative alpha over the past five years of -3.19, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VHCIX is a no load fund. It has an expense ratio of 0.09% compared to the category average of 1.08%. Looking at the fund from a cost perspective, VHCIX is actually cheaper than its peers.
While the minimum initial investment for the product is $100,000, investors should also note that each subsequent investment needs to be at least $1.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
For additional information on the Sector – Health area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VHCIX too 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Get Your Free (VHCIX): Fund Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
