Can a New Manager Cure Vanguard Health Care Fund?
Vanguard Health Care Fund has assets of $40.5 billion but has been ailing in recent years. With a new manager in charge, what's the prognosis?


Vanguard Health Care (VGHAX) has a new manager, Rebecca Sykes. Well, maybe not so new. Sykes, who started with the fund as an analyst in 2007, joined Jean Hynes as comanager in 2023.
But at the start of 2025, Hynes stepped away from the fund — though she’ll stay on as chief executive of Wellington Management, the fund’s subadviser, a position she’s held since early 2021. “The change is part of a thoughtful, long-term succession plan,” a Vanguard spokesman said.
Health Care, which has $40.5 billion in assets, is the big kahuna of its category, so Sykes’s new role as sole manager — the third in the fund’s 40-year history — is noteworthy.
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Challenges lie ahead. Although Health Care had the best 30-year annualized record of any U.S. stock mutual fund at the end of 2016, it has had uneven returns of late, and its 10-year annualized return now ranks below average.
Health Care Fund strategy
We’ll be watching the fund closely. Every new manager makes their mark on a fund, even if they’re well schooled in the previous manager’s ways. That said, Sykes says she will carry on the firm’s research-driven, team-focused and collaborative approach. And like Hynes, she will focus on undervalued companies of all sizes all over the world (non-U.S. stocks make up 27% of the fund’s portfolio) that are poised to play key roles in the future of medicine and healthcare.
“I believe innovation will continue to drive value over the long term,” says Sykes.
The fund typically balances hefty stakes in the managers’ highest-conviction stocks with smaller holdings in baskets of stocks to gain exposure to specific subsectors or themes. Top holding Eli Lilly (LLY), for instance, represents almost 10% of the fund’s assets.
But in 2024, with biotech shares languishing, the fund initiated new stakes in five biotech firms, including Avidity Biosciences and Crinetics Pharmaceuticals.
Help for healthcare stocks
Sykes says she’s excited about the future of healthcare. Clarity on the new administration’s policy on drug pricing, vaccines and government insurance programs could “help lift healthcare stocks,” she says. And new data for medicine to treat obesity, high cholesterol and lung cancer could “advance the standards of care and help reinvigorate the performance of biotech stocks.”
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
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Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.
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