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Is ProFunds UltraBull Fund Investor (ULPIX) a Strong Mutual Fund Pick Right Now?

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There are plenty of choices in the Large Cap Blend category, but where should you start your research? Well, one fund that might be worth investigating is ProFunds UltraBull Fund Investor (ULPIX - Free Report) . ULPIX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

ULPIX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.

History of Fund/Manager

ProFunds is based in Columbus, OH, and is the manager of ULPIX. ProFunds UltraBull Fund Investor made its debut in November of 1997, and since then, ULPIX has accumulated about $132.49 million in assets, per the most up-to-date date available. The fund is currently managed by Rachel Ames who has been in charge of the fund since October of 2013.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 28.56%, 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 18.89%, 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. The standard deviation of ULPIX over the past three years is 20.54% compared to the category average of 10.49%. Looking at the past 5 years, the fund's standard deviation is 19.34% compared to the category average of 9.9%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. ULPIX lost 81.23% in the most recent bear market and underperformed its peer group by 31.56%. This might suggest that the fund is a worse choice than its peers during a bear market.

Nevertheless, investors should also note that the fund has a 5-year beta of 2.04, which means it is hypothetically 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. Over the past 5 years, the fund has a negative alpha of -3.39. This means that managers in this portfolio find it difficult to pick 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 mostly on equities that are traded in the United States.

Currently, this mutual fund is holding 75.42% stock in stocks, with an average market capitalization of $173.44 billion. The fund has the heaviest exposure to the following market sectors:

  1. Other
  2. Technology
  3. Finance

This fund's turnover is about 9%, so the fund managers are making fewer trades than the average comparable fund.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, ULPIX is a no load fund. It has an expense ratio of 1.42% compared to the category average of 1%. So, ULPIX 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 UltraBull Fund Investor 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.

For additional information on this product, or to compare it to other mutual funds in the Large Cap Blend, 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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