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Healthcare Sector
Old 04-11-2011, 03:30 AM   #1
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Healthcare Sector

What do you think about the prospect for the Health Care sector?

VG health care sector fund has done pretty well since its inception in 1984.

Our health care seem to be in a state of change in terms of policy which might cause of uncertainty about winners and losers.

But there is little doubt that there will be an increase in consumption.

Good or Bad investment?? Over the short, medium, and long term?

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Old 04-11-2011, 06:36 AM   #2
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I/DW have held VGHCX/VGHAX for close to two decades and have been pleased with our overall results.

While this question comes up in many forums I'll just comment on why we keep it.

For us, it was a consistent "winner" over many years and worked out for the type of investing we do (long term - don't concentrate on short-term flux).

The expense ratio of VGHAX is 84% less than similar sector funds.

It does not only invest in Parma, but also medical supply companies, and research firms. Additionally, it adds a mix of both domestic and foreign held companies.

As far as possible changes to U.S. public health care laws? We don't look at it in a negative manner, at all. Remember (and speaking for VG's HC funds only), they do represent foreign companies - and foreign public health care "systems" - most unlike the current U.S. variety.

We also feel that if HC changes in the Parma area (e.g. sourcing drugs less expensively from another country), the expansion of drugs to those who cannot afford them will radically increase. What is lost in quality/high-price will be replaced by quantity in sales/usage.

Finally, we've always believed in investing in what we know, and what we use. As early boomers and even generally healthy at this time, our use of meds has increased over the years. I would suspect that use will increase radically for our remaining years, along with our boomer cohorts.

Our opinion, since you asked...

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Old 04-11-2011, 06:39 AM   #3
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I have been in this fund for 15 years and am very pleased. I have always been attracted to sector funds that take advantage of trends. The demographics are that the US population is getting older and this fund invests in the area's that will profit from that.
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Old 04-12-2011, 06:36 AM   #4
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I/DW also have held VG health for over 15 years. We have held this fund for many of the same reasons as the other posters. Foreign Co. etc. I also like the idea of investing in research/health related issues.

That being said, just remember that this fund is listed as Aggressive Growth. I have watched this fund "bounce" $20, $30, $40 per share. So only a SMALL % of our holdings are in this fund.

(Maybe someone with more computer skills could post a graph of this funds share price as well as returns?)

Peace, Dances.
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Old 04-12-2011, 06:56 AM   #5
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Originally Posted by Dances With Fire View Post
(Maybe someone with more computer skills could post a graph of this funds share price as well as returns?)

Peace, Dances.
For dividends (just click on the selection to change to prices):

VGHCX Historical Prices | VANGUARD SPECIALIZED PTS HEALTH Stock - Yahoo! Finance

Chart (click on to make larger):
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