2 Mutual Funds Holding Hospital Stocks
Benzinga 12 years ago
Health CareGeneral
Health care continues to be the leading S&P sector year-to-date, as well as over the past three months.
Within health care, the sub-sector of hospitals is holding a leadership position at the beginning of October. A leading performer has been HCA Holdings Inc. (NYSE: HCA), which has advanced nearly 50 percent year-to-date.
Vanguard Health Care
The Vanguard Health Care Fund (MUTF: VGHCX) owns 1.56 percent of HCA shares, accounting for 1.02 percent of fund assets. This is a huge sector fund, with assets of $40.7 billion. Its Net Asset Value is $213.66. The fund has gained 14.16 percent so far in 2014.
HCA is not even one of the top holdings in the Vanguard Health Care fund; those honors go to Merck & Co., Inc. (NYSE: MRK), Bristol-Myers Squibb Co. (NYSE: BMY) and UnitedHealth Group, Inc. (NYSE: UNH).
Fidelity Select Medical Delivery
For more targeted exposure to the hospital industry, investors might want to look at the Fidelity Select Medical Delivery Portfolio (MUTF: FSHCX).
The fund seeks to invest at least 80 percent of its assets in stocks of hospitals, nursing homes, health maintenance organizations, or other health-care-delivery companies.
The fund has a net asset value of $79.31 and assets of $729 million. It stands to reason that a very targeted sub-sector fund would be smaller than a fund with much broader sector exposure, such as the Vanguard Health Care fund. In fact, this fund only holds 47 stocks.
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The Fidelity Select Medical Delivery Portfolio has advanced 8.72 percent year-to-date. The top holdings are: UnitedHealth Group, 15.68 percent of fund assets; Express Scripts Holding Co. (NASDAQ: ESRX), 12.49 percent of fund assets; McKesson Corp (NYSE: MCK), 9.09 percent of fund assets; Cardinal Health Inc (NYSE: CAH); HCA, 5.87 percent of fund assets; and Cigna Corp (NYSE: CI), 4.67 percent of fund assets.
The expense ratio on this fund is 0.82 percent, not at all exorbitant. Investors should be prepared to re-balance or sell and take profits if they are investing in a specific sub-sector, such as health-care delivery.