Is Macquarie Healthcare I (DLHIX) a Strong Mutual Fund Pick Right Now?

Sector – Health fund seekers may want to consider taking a look at Macquarie Healthcare I (DLHIX). DLHIX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

We note that DLHIX 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.

Macquarie is based in Philadelphia, PA, and is the manager of DLHIX. Macquarie Healthcare I made its debut in September of 2007, and since then, DLHIX has accumulated about $475.81 million in assets, per the most up-to-date date available. Liu Er Chen is the fund’s current manager and has held that role since September of 2007.

Obviously, what investors are looking for in these funds is strong performance relative to their peers. DLHIX has a 5-year annualized total return of 6.49% 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 6.73%, which places it in the top 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, DLHIX’s standard deviation comes in at 12.85%, compared to the category average of 14.69%. The fund’s standard deviation over the past 5 years is 13.3% compared to the category average of 15.76%. This makes the fund less volatile than its peers over the past half-decade.

Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. DLHIX has a 5-year beta of 0.58, which means it is likely to be less 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. DLHIX has generated a negative alpha over the past five years of -3.1, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.