Is Hartford Healthcare Fund HLS IA (HIAHX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research

Sector - Health fund seekers should consider taking a look at Hartford Healthcare Fund HLS IA (HIAHX). HIAHX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that HIAHX is a Sector - Health fund, and this area is also loaded with various options. Sector - Health mutual funds give investors an opportunity to focus on one of the largest sectors of the American economy, healthcare. Funds in this category can include everything from for-profit hospitals to pharmaceutical companies and medical device manufacturers.

History of Fund/Manager

Hartford is based in Woodbury, MN, and is the manager of HIAHX. Since Hartford Healthcare Fund HLS IA made its debut in December of 2001, HIAHX has garnered more than $169.26 million in assets. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 9.22%, 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 9.67%, 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 HIAHX over the past three years is 15.57% compared to the category average of 13.24%. Looking at the past 5 years, the fund's standard deviation is 16.25% compared to the category average of 13.55%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, HIAHX lost 36.94% and underperformed its peer group by 4%. This could mean that the fund is a worse choice than comparable funds during a bear market.

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. HIAHX has a 5-year beta of 1.05, which means it is likely to be more volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. HIAHX's 5-year performance has produced a negative alpha of -0.68, which means 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, HIAHX is a no load fund. It has an expense ratio of 0.89% compared to the category average of 1.28%. Looking at the fund from a cost perspective, HIAHX 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 IA ( HIAHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Hartford Healthcare Fund HLS IA ( HIAHX ) 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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