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Is ProFunds UltraChina Investor (UGPIX) a Strong Mutual Fund Pick Right Now?

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Having trouble finding a China - Equity fund? Well, ProFunds UltraChina Investor (UGPIX - Free Report) would not be a good potential starting point right now. UGPIX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that UGPIX is a China - Equity option, an area loaded with different options. China - Equity mutual funds and their investments revolve around stocks in China, Taiwan, and Hong Kong. China's middle class is booming, and its economy reflect this demographic's rise more than the vast export-focused manufacturing one we typically associate with the country. Even if this strategy sounds enticing, you may want to look past UGPIX.

History of Fund/Manager

ProFunds is based in Columbus, OH, and is the manager of UGPIX. Since ProFunds UltraChina Investor made its debut in February of 2008, UGPIX has garnered more than $14.97 million in assets. Scott Hanson is the fund's current manager and has held that role since August of 2016.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 27.88%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 8.24%, 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 26.64%, the standard deviation of UGPIX over the past three years is 45.67%. Over the past 5 years, the standard deviation of the fund is 40.07% compared to the category average of 22.99%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.83, so it is likely going to be more volatile than the market at large. 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 4.24, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, UGPIX is a no load fund. It has an expense ratio of 1.79% compared to the category average of 1.59%. Looking at the fund from a cost perspective, UGPIX is actually more expensive than its peers.

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 UltraChina Investor ( UGPIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, ProFunds UltraChina Investor ( UGPIX ) looks like a poor potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the China - Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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