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

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Large Cap Blend fund seekers should consider taking a look at ProFunds UltraBull Fund Investor (ULPIX - Free Report) . ULPIX bears 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 part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.

History of Fund/Manager

ProFunds is based in Columbus, OH, and is the manager of ULPIX. Since ProFunds UltraBull Fund Investor made its debut in November of 1997, ULPIX has garnered more than $132.49 million in assets. 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 it sits 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%. The standard deviation of the fund over the past 5 years 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

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In ULPIX's case, the fund lost 81.23% in the most recent bear market and underperformed comparable funds by 31.56%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. ULPIX has a 5-year beta of 2.04, which means it is likely to be more volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. ULPIX's 5-year performance has produced a negative alpha of -3.39, which means 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 primarily on equities that are traded in the United States.

The mutual fund currently has 75.42% of its holdings in stocks, which have 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

Turnover is 9%, which means this fund makes fewer trades than its comparable peers.

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, 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, ProFunds UltraBull Fund Investor 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.




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