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Health-Care Funds in retirement
Old 07-20-2020, 01:45 PM   #1
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Health-Care Funds in retirement

Curious if anyone uses health-care mutual funds as part of a retirement portfolio?

Certainly health-care encompasses many things so SOLELY as an example - not touting it - I mention PRHSX - managed by a guy who is also a doctor. Stocks include anything from Pharma, or HMO, to medical equipment.

Some of these health funds seem to have done really well - though they certainly have more volatility than some of the more common retiree Mutual Funds.

Basic philosophy here: America is aging. The older America gets, the more interest, demand, and need for health care and health care advances.

Furthermore be it China, India, whatever - as their people go from poor to middle class, middle-class to upper-middle - heck, who doesn't want to live longer or better?

Anyways, curious if folks here see health care as part of their investment strategy. Thanks
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Old 07-20-2020, 02:20 PM   #2
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I have owned PRHSX in my non-retirement account for the past 8 years, dollar-cost averaging in while w*rking, and holding and spending the capital gains and dividends the past 2 years while retired. It has been a good although volatile sector bet, and I think the future prospects of the health care industries it invests in remain strong. However, I have more recently been thinking of selling the fund. The unpredictable and sometimes large capital gains in December makes it harder to figure out if I will qualify for health care subsidies in early retirement. Kinda ironic.
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Old 07-22-2020, 11:33 AM   #3
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Have owned Fidelity Select Medical Technology & Devices Portfolio (FSMEX) since April 2012.

Also own NHI, a healthcare REIT consisting of independent, assisted & memory care communities, entrance-fee retirement communities, skilled nursing facilities, medical office buildings, & specialty hospitals.

The fund is more for capital appreciation, the REIT, income.
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Old 07-26-2020, 03:04 AM   #4
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This was the same reasoning behind investing in senior housing and skilled nursing care. I do not think that has played out so well for a couple of stocks/reits that come to mind such as "New Senior Investment Group Inc. (SNR)" or "Ventas, Inc. (VTR)". I have not followed these very closely just noticed that while there was demand for the service, the price of giving care rose fast which hurt reimbursement and profits. Health insurance is another sub-sector, how nice would it have been to invest in "UnitedHealth Group Incorporated (UNH)" back in 2008.

In short I would not invest specifically in this sector, but as part of a balanced portfolio. I think it is too hard given that even though there is potentially a lot of demand, it is not subject to normal economics, instead being more an issue of how the State decides what to insure and how to pay for it.
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Old 07-26-2020, 04:22 AM   #5
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Long ago I owned an Energy sector fund, it was "obvious" to me that sector would outperform - that was before fracking/horizontal drilling, fluctuating demand, etc. and who knows what else yet to come. I sold it years ago. Now my only "sector" fund is a REIT, and that's not exactly what I'd hoped either. So I invest in the broad market with a couple tilts. YMMV
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Old 07-26-2020, 06:46 AM   #6
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Old 07-26-2020, 08:13 PM   #7
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I have thought about purchasing a healthcare fund before, but no I have never invested in health care. I am not saying it's bad, but it's volatile and I always seem to find other places to put my money. After March and the downturn, my portfolio rebounded nicely in line with the market and after the dust settled so to speak I have about 45% in stocks and I am happy with that and not looking to add to the volatility I do experience.
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Old 07-26-2020, 08:32 PM   #8
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The baby boomers are aging and needing health care . Plus we have a Pandemic going on . Health care stocks are making money . I have had Vanguard Health Care fund for over 20 years and it has done very well.
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Old 07-27-2020, 12:39 AM   #9
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Quote:
Originally Posted by Moemg View Post
The baby boomers are aging and needing health care . Plus we have a Pandemic going on . Health care stocks are making money . I have had Vanguard Health Care fund for over 20 years and it has done very well.
I too own this. The problem is I also own Vanguard Total Stock Market, which has 14% in health care stocks. We also own Primecap, which is currently 29% in HC stocks, and Capital Opportunity which is at 35% !!

Needless to say, we're overweighted in this sector, but we're stuck since a lot of this is in taxable accounts.

Be careful adding sector funds ....
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Old 07-27-2020, 01:16 AM   #10
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I have owned Vanguard Health Care Fund (VGHAX) for several decades in a Traditional IRA and have been quite happy with the performance.
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Old 07-27-2020, 05:34 AM   #11
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I think over long periods, healthcare has done well. You do have to be careful on specific subsectors , such as facilities. Yes demand has grown over time but so has supply.

I have preferred to own individual names rather than sector funds.
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