Can a Fresh Leadership Approach Revitalize the Vanguard Health Care Fund?

Vanguard Health Care Fund (VGHAX) has a new leader: Rebecca Sykes. She’s not a stranger to the fund; Sykes has been with Vanguard since 2007 and was co-manager with Jean Hynes. As of 2025, Sykes is taking the helm entirely since Hynes will focus on her role as CEO of Wellington Management.

The Health Care Fund is a giant in its field, managing over $40 billion. It’s significant that Sykes is the third manager in the fund’s 40-year history. This transition follows a thoughtful succession plan aimed at maintaining stability in leadership.

However, the fund faces challenges. Once a top performer, its recent returns have been inconsistent, now ranking below average over the last decade. As Sykes steps in, how she navigates these challenges will be under close observation.

Sykes aims to keep the fund’s strategy intact, focusing on undervalued companies worldwide. Currently, 27% of the fund’s portfolio consists of non-U.S. stocks. Sykes believes that innovation in healthcare will lead to long-term value. For example, Eli Lilly, one of the fund’s largest holdings, makes up nearly 10% of its assets.

In light of recent market conditions where biotech shares are struggling, the fund has recently invested in five new biotech firms, including Avidity Biosciences and Crinetics Pharmaceuticals. This shift signals a strategic pivot that may help the fund recover its former glory.

Sykes is optimistic about the future. She sees potential in upcoming governmental policy changes on drug pricing and healthcare that could positively impact the stock market. Additionally, new advancements in treatments for obesity, high cholesterol, and lung cancer might boost the performance of biotech stocks.

It’s clear that Sykes is a passionate advocate for the healthcare sector’s future, and many will be watching how her leadership shapes the fund moving forward.

Check out this related article: Unlocking Innovations: MultiOmic Health and Alloy Therapeutics Join Forces to Develop Kidney-Targeted Drugs