Wiener: In the Vanguard
01/02/2004 12:00 am EST
Dan Wiener is the leading source of independent advice on the Vanguard family of funds. His top 2003 pick, the conservative growth and income play, Vanguard Selected Value, returned 32%. For this year, he looks for a rebound in the healthcare sector.
"Our top pick for 2004 is Vanguard Health Care (VGHCX). While the biotechnology sector has been red hot in 2003, large pharmaceutical makers are poised for a rebound in 2004. Development pipelines are beginning to look stronger, the new Medicare pharmaceutical benefits will be a boon, and attractive dividend yields all combine to make the drug companies look darned appetizing. Plus, the oldest of the massive baby-boom generation are in their late 50's and are spending freely on everything from artificial knees and hips to liposuction and cholesterol-lowering drugs."
"This is a growth industry. To that end, Vanguard Health Care, run by Wellington Management's Ed Owens, is a fabulous play. The fund's long-term record is market-beating in every respect, the manager has been on board since its 1984 inception, and unlike most sector funds, Health Care's volatility is actually lower than the overall market's. Owens has been finding stocks in far-away markets including Japan's, where he says the drug companies are relatively undervalued. The fund's only drawback is its $25,000 minimum. If you can't afford this, try Icon Health Care (ICHCX)."