HealthEquity Funds

detrick

Hi,

I have an HSA with HealthEquity and would appreciate any input/advice on the available funds they have. It seems that in many cases there are multiple mutual funds in a single asset class and I am trying to better understand how to compare and select one.

Category Symbol	Fund	Name
COMMODITIES BROAD BASKET	PCRDX	PIMCO COMMODITY REAL RET STRAT D
DIVERSIFIED EMERGING MKTS	RNWEX	AMERICAN FUNDS NEW WORLD R4
DIVERSIFIED EMERGING MKTS	DREGX	DRIEHAUS EMERGING MARKETS GROWTH
DIVERSIFIED EMERGING MKTS	ODVNX	OPPENHEIMER DEVELOPING MARKETS N
DIVERSIFIED EMERGING MKTS	HEMZX	VIRTUS EMRG MKTS OPPTY FD CL A
FOREIGN LARGE BLEND	ARTKX	ARTISAN INTERNATIONAL VALUE INVESTOR
FOREIGN LARGE BLEND	LISOX	LAZARD INTL STRATEGIC EQUITY OPEN
FOREIGN LARGE BLEND	OIDNX	OPPENHEIMER INTERNATIONAL DIVERSIFIED N
FOREIGN LARGE GROWTH	OIGAX	OPPENHEIMER INTERNATIONAL GROWTH A
FOREIGN LARGE VALUE	MINGX	MFS INTERNATIONAL VALUE R3
INFLATION-PROTECTED BOND	PRRRX	PIMCO REAL RETURN R
INTERMEDIATE-TERM BOND	CHTBX	ASTON/TCH FIXED INCOME N
INTERMEDIATE-TERM BOND	MWTRX	METROPOLITAN WEST TOTAL RETURN BOND M
INTERMEDIATE-TERM BOND	PIOBX	PIONEER BOND FUND CL A
INTERMEDIATE-TERM BOND	CMPIX	PRINCIPAL INCOME A
INTERMEDIATE-TERM BOND	PDBAX	PRUDENTIAL TOTAL RETURN BOND A
LARGE BLEND	SMGIX	COLUMBIA CONTRARIAN CORE Z
LARGE GROWTH	WCEYX	IVY CORE EQUITY Y
LARGE VALUE	IEDAX	ING LARGE CAP VALUE A
LARGE VALUE	LCEIX	INVESCO DIVERSIFIED DIVIDEND INVESTOR
LARGE VALUE	FDSAX	SUNAMERICA FOCUSED DIVIDEND STRATEGY A
MID-CAP BLEND	FEFAX	FIRST EAGLE FUND OF AMERICA CL A
MID-CAP GROWTH	NICSX	NICHOLAS
MID-CAP GROWTH	PEMGX	PRINCIPAL MIDCAP A
MID-CAP GROWTH	RYBHX	RYDEX S&P MIDCAP 400 PURE GROWTH H
MODERATE ALLOCATION	BALFX	AMERICAN FUNDS AMERICAN BALANCED F-1
NATURAL RESOURCES	FMFTX	FIDELITY ADVISOR MATERIALS T
NATURAL RESOURCES	ICBMX	ICON MATERIALS S
NATURAL RESOURCES	RYBAX	RYDEX BASIC MATERIALS ADV
REAL ESTATE	RRREX	DWS RREEF REAL ESTATE SECURITIES S
REAL ESTATE	FHETX	FIDELITY ADVISOR REAL ESTATE T
REAL ESTATE	PETDX	PIMCO REAL ESTATE REAL RETURN STRATEGY D
REAL ESTATE	HLPPX	REMS REAL ESTATE VALUE OPPORTUNITY P
SMALL GROWTH	SASMX	CLEARBRIDGE SMALL CAP GROWTH A
SMALL GROWTH	JGMRX	JANUS TRITON R
WORLD BOND	GOBAX	LEGG MASON BW GLOBAL OPPORTUNITIES BD A
WORLD BOND	MGGBX	MANAGERS GLOBAL INCOME OPPORTUNITY
WORLD BOND	PFODX	PIMCO FOREIGN BOND (USD-HEDGED) D
WORLD BOND	GTRAX	PRUDENTIAL GLOBAL TOTAL RETURN A

Also, are there any thoughts on COLUMBIA CONTRARIAN CORE Z (SMGIX)? I had been using a Vanguard Fund, but it is being replaced with this.

Thanks!

jerry

While I have not had a Health service Account I assume that the correct advice is somewhat similar to the standard advice for retirement funds which is if you are young be aggresive as you won't need the money (you may of course as accidents happen ) and as you grow older you are more likely to need it and so your asset allocation should be more conservative . This raises the question, can you have more than one fund in the account?.
In any event I think your asset allocation in this account should be whatever your planned allocation for your retirement account will be 5-10 years in the future.

Sorry for the lack of a specific response but other than a few of the Pimco bond funds I am not very familiar with most of these funds

andrei

Interesting collection of funds, many of which are top-notch. For example, all emerging markets funds in the list are on the top of the list in M*, some of them are closed to new investors, but perhaps you can invest in them in this plan. The same is true for ARTKX, which is one of the best international value fund, closed to new investors.

AndyJ

This is a health savings account, yes? I don't know that much about them, but it seems like the first thing you'd want to do is make an allocation plan based on age, how much you're putting into it, what your med bills are like, how much liquidity you need in the account, things like that, before analyzing the specific fund options. That might tell you, for just one example, whether you're really a candidate for an EM stock fund and its implied volatility.

Imho, the list looks to have decent options in most categories except balanced/allocation funds.

bee

Since you are responsible for certain health cost I woud determine what that amount would be in a 1-3 year timeframe and allocate those dollars to conservative investments. As you spend down these health savings remember to reallocate so you always have a 1-3 year conservative allocation to access. If your HSA accumulates beyond these 1-3 year health needs than create a diversified portfolio with 1/2 US and 1/2 Foriegn.

Choices for 1-3 year (safe) money:
Cash = 20% at all times to meet deductibles and maintenance expenses.
MWTRX - 1st choice...excellent long term safe money position (70% of safe money)
CHTBX - 2nd
PFODX - 3rd
PRRRX - 4th, May help protect your safe money when rates (inflation) returns (10% of safe money)

detrick

Thank you all for your feedback - its appreciated. I wasn't entirely wanting to discuss asset allocation or the ins-and-outs of HSAs in detail. Rather, I wanted to better understand how I could go about selecting a particular fund in a given asset class. Are there other threads that already cover this? If so - please point me to them! Are there some philosophies that folks here ascribe to?

For example, all 4 diversified emerging markets funds (RNWEX, DREGX, ODVNX, HEMZX) are Morningstar 5 star funds, but have different expense ratios, performance history, and net assets. And probably a lot of other things!

Are there some good methods to assess mutual funds that I could work with? Right now I feel like I am close to just picking something in the dark. As an example andrei mentions that ARTKX is one of the "best" international value funds. That's great! But why?

Thanks!

AndyJ

You're asking how to pick a mutual fund in general? If that's it, I'd suggest starting with some basic reading, such as:

http://www.investopedia.com/university/quality-mutual-fund/

You'd also be well advised to explore M* beyond the simple headline star ratings. The ratings and risk pages for individual funds are a good place to get headed in the right direction.

However, if you're to pick something that's right for your situation, you won't be able to avoid the kind of thinking suggested earlier in this thread.

msf

Detrick, meet AMatMFO. AMatMFO, meet detrick.

AMatMFO recently started a thread on a particular fund in your set of offerings - SunAmerica Focused Div Strategy (FDSAX). In this thread you'll find some positive comments about the fund that go beyond counting stars. So you might find that thread useful.

Conversely, the question there is how to purchase the fund without paying the front end load. Using an HSA account like this one (assuming the investor has an HSA account that could be transferred) might be an answer to the question.

One qualification - I can't tell for sure whether HealthEquity waives front end loads. What I can tell from looking at its fund list, is that not all loads are waived. Funds are often sold in multiple share classes, and if the share class you're looking at charges too much (technically, a 12b-1 fee in excess of 0.25%/year), it is considered a load fund. That extra charge can be used to pay the broker (or HealthEquity).

One of the funds sold in this HSA, PIMCO Real Return R (PRRRX), fits that description. So you need to look out for not only which funds you want, but whether you'd be paying too much for them by buying them here. (The PIMCO fund is available from pretty much any broker in a "D class" that charges 1/4% less - PRRDX.)