Mutual Fund Spotlight: T. Rowe Price Health Sciences Fund [PRHSX]
By: Ted Black, CFP©
Fall 2018 (Vol. 36, No. 3)
Not unlike many developed countries, as a nation, the United States has an aging population. It is said that somewhere in the neighborhood of 10,000 baby boomers turn age 65 each and every day. As a larger portion of our population moves into retirement, it doesn’t seem unreasonable to expect that the demand for health care services and products will continue to grow - perhaps significantly so.
For investors with a long-term outlook, this shift in the demographic makeup of our country may be of interest. An industry with strong and durable demand for its products and services may offer solid investment opportunities. Companies that can provide quality products and/or services at competitive prices, or introduce technological breakthroughs, have the opportunity to grow their revenues and earnings, and subsequently see their share price appreciate.
T. Rowe Price Health Sciences fund (PRHSX) is a no-load mutual fund that invests at least 80% of net assets in common stocks of companies engaged in the research, development, production, or distribution of products or services related to health care, medicine, or the life sciences. While the fund can invest in companies of any size, the majority of fund assets are expected to be invested in large and mid-capitalization companies.
This fund has almost $14 billion in assets under management and is managed by Ziad Bakri, CFA, M.D. since April of 2016. As of September 30, 2018, the fund had approximately 91% of its assets in U.S. Stocks, and about 7% in foreign stocks. The minimum initial investment is $2,500 for non-retirement accounts and $1,000 for IRA accounts.
Due to the fund’s concentration in health sciences companies, its share price may be more volatile than that of funds with a more diversified group of holdings. Investments in “sector” funds such as this one must be weighed on a case by case basis, but typically we recommend no more than 5% to 15% of one’s overall portfolio in any one sector fund.
Performance annualized and updated through 09/30/2018: 1-Year: +22.22%; 3-Year: +14.00%; 5-Year: +17.46%. The gross annual expense ratio is 0.77%.
If you’re interested in this fund, or would like a portfolio review to determine if this fund might be an appropriate addition to your portfolio, please call Ted Black, CFP® at 888-878-0001, extension 3.
Statistics and information provided by Morningstar and T. Rowe Price Investment Services, Inc. Please visit the T. Rowe Price website at www.troweprice.com for the most recent performance information. The principal value and investment return will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns shown, unless otherwise indicated, are total returns, including any capital gains or losses and all dividend and capital gains distributions. The performance data quoted represents past performance and in no way guarantees future results. Mutual funds are not FDIC insured.
Mutual funds are sold by prospectus. An investor should consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus contains this and other information about the investment company. Please contact our office at 888-878-0001 to obtain a prospectus. Please read the prospectus carefully before you invest or send money.
Advisory services offered through Royal Palm Investment Advisors, Inc., a Registered Investment Advisor.