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Is ProFunds Technology UltraSector Investor (TEPIX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Sector - Tech fund? Starting with ProFunds Technology UltraSector Investor (TEPIX - Free Report) is one possibility. TEPIX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Sector - Tech funds is an area filled with options, and TEPIX is one of them. Sector - Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach. Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.
History of Fund/Manager
TEPIX finds itself in the ProFunds family, based out of Columbus, OH. ProFunds Technology UltraSector Investor debuted in June of 2000. Since then, TEPIX has accumulated assets of about $83.11 million, according to the most recently available information. The fund's current manager, Michael Neches, has been in charge of the fund since October of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 22.67%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 34.09%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 13.44%, the standard deviation of TEPIX over the past three years is 24.46%. Looking at the past 5 years, the fund's standard deviation is 24.88% compared to the category average of 13.36%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. TEPIX lost 68.73% in the most recent bear market and underperformed comparable funds by 15%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, with a 5-year beta of 1.81, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a positive alpha of 4.33, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
This fund is currently holding about 93.34% stock in stocks, and these companies have an average market capitalization of $432.48 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Other
This fund's turnover is about 332%, so the fund managers are making more traders than comparable funds in a given year.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, TEPIX is a no load fund. It has an expense ratio of 1.58% compared to the category average of 1.39%. So, TEPIX is actually more expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $15,000 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, ProFunds Technology UltraSector Investor ( TEPIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
Don't stop here for your research on Sector - Tech funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare TEPIX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is ProFunds Technology UltraSector Investor (TEPIX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Sector - Tech fund? Starting with ProFunds Technology UltraSector Investor (TEPIX - Free Report) is one possibility. TEPIX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Sector - Tech funds is an area filled with options, and TEPIX is one of them. Sector - Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach. Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.
History of Fund/Manager
TEPIX finds itself in the ProFunds family, based out of Columbus, OH. ProFunds Technology UltraSector Investor debuted in June of 2000. Since then, TEPIX has accumulated assets of about $83.11 million, according to the most recently available information. The fund's current manager, Michael Neches, has been in charge of the fund since October of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 22.67%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 34.09%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 13.44%, the standard deviation of TEPIX over the past three years is 24.46%. Looking at the past 5 years, the fund's standard deviation is 24.88% compared to the category average of 13.36%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. TEPIX lost 68.73% in the most recent bear market and underperformed comparable funds by 15%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, with a 5-year beta of 1.81, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a positive alpha of 4.33, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
This fund is currently holding about 93.34% stock in stocks, and these companies have an average market capitalization of $432.48 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Other
This fund's turnover is about 332%, so the fund managers are making more traders than comparable funds in a given year.Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, TEPIX is a no load fund. It has an expense ratio of 1.58% compared to the category average of 1.39%. So, TEPIX is actually more expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $15,000 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, ProFunds Technology UltraSector Investor ( TEPIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
Don't stop here for your research on Sector - Tech funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare TEPIX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.