Is T. Rowe Price Health Sciences (PRHSX) a Strong Mutual Fund Pick Right Now?

If you have been looking for Sector – Health funds, a place to start could be T. Rowe Price Health Sciences (PRHSX). PRHSX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

We note that PRHSX 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.

T. Rowe Price is based in Baltimore, MD, and is the manager of PRHSX. The T. Rowe Price Health Sciences made its debut in December of 1995 and PRHSX has managed to accumulate roughly $7.73 billion in assets, as of the most recently available information. Ziad Bakri is the fund’s current manager and has held that role since April of 2016.

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 4.29%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 2.8%, 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. The standard deviation of PRHSX over the past three years is 14.35% compared to the category average of 14.83%. The standard deviation of the fund over the past 5 years is 15.29% compared to the category average of 14.95%. This makes the fund more volatile than its peers over the past half-decade.

Investors should note that the fund has a 5-year beta of 0.69, 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 -6.79, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.