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Is ProFunds Semicond UltraSector Service Class (SMPSX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Sector - Tech fund? ProFunds Semicond UltraSector Service Class (SMPSX - Free Report) is a potential starting point. SMPSX possesses 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 SMPSX 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
ProFunds is based in Columbus, OH, and is the manager of SMPSX. The ProFunds Semicond UltraSector Service Class made its debut in June of 2000 and SMPSX has managed to accumulate roughly $1.98 million in assets, as of the most recently available information. The fund is currently managed by Michael Neches who 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 in particular has delivered a 5-year annualized total return of 23.98%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 30.5%, 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. Over the past three years, SMPSX's standard deviation comes in at 32.55%, compared to the category average of 13.26%. Looking at the past 5 years, the fund's standard deviation is 31.51% compared to the category average of 13.38%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, SMPSX lost 74.41% and underperformed comparable funds by 21%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 2, so investors should note that it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a positive alpha over the past 5 years of 4.17, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining 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 principally on equities that are traded in the United States.
Right now, 80.1% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $102.10 billion. Turnover is 106%, which means this fund makes fewer trades than comparable funds.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, SMPSX is a no load fund. It has an expense ratio of 2.55% compared to the category average of 1.39%. So, SMPSX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $15,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, ProFunds Semicond UltraSector Service Class ( SMPSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, ProFunds Semicond UltraSector Service Class ( SMPSX ) looks like a good potential choice for investors right now.
Want even more information about SMPSX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is ProFunds Semicond UltraSector Service Class (SMPSX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Tech fund? ProFunds Semicond UltraSector Service Class (SMPSX - Free Report) is a potential starting point. SMPSX possesses 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 SMPSX 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
ProFunds is based in Columbus, OH, and is the manager of SMPSX. The ProFunds Semicond UltraSector Service Class made its debut in June of 2000 and SMPSX has managed to accumulate roughly $1.98 million in assets, as of the most recently available information. The fund is currently managed by Michael Neches who 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 in particular has delivered a 5-year annualized total return of 23.98%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 30.5%, 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. Over the past three years, SMPSX's standard deviation comes in at 32.55%, compared to the category average of 13.26%. Looking at the past 5 years, the fund's standard deviation is 31.51% compared to the category average of 13.38%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, SMPSX lost 74.41% and underperformed comparable funds by 21%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 2, so investors should note that it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a positive alpha over the past 5 years of 4.17, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining 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 principally on equities that are traded in the United States.
Right now, 80.1% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $102.10 billion. Turnover is 106%, which means this fund makes fewer trades than comparable funds.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, SMPSX is a no load fund. It has an expense ratio of 2.55% compared to the category average of 1.39%. So, SMPSX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $15,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, ProFunds Semicond UltraSector Service Class ( SMPSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, ProFunds Semicond UltraSector Service Class ( SMPSX ) looks like a good potential choice for investors right now.
Want even more information about SMPSX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.