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Is ProFunds Internet UltraSector Investor (INPIX) a Strong Mutual Fund Pick Right Now?

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Sector - Tech fund seekers should consider taking a look at ProFunds Internet UltraSector Investor (INPIX - Free Report) . INPIX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

INPIX is part of the Sector - Tech category, which boasts an array of different possible selections. With a much more diversified approach, Sector - Tech mutual funds give investors a way to own a stake in a notoriously risky sector. Tech companies are in various industries like semiconductors, software, internet, and networking, among others.

History of Fund/Manager

ProFunds is based in Columbus, OH, and is the manager of INPIX. The ProFunds Internet UltraSector Investor made its debut in June of 2000 and INPIX has managed to accumulate roughly $139.47 million in assets, as of the most recently available information. The fund's current manager, Michael Neches, 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 33.9%, 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 32.9%, 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. INPIX's standard deviation over the past three years is 22.9% compared to the category average of 11.95%. Over the past 5 years, the standard deviation of the fund is 23.19% compared to the category average of 11.57%. 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. In INPIX's case, the fund lost 69.55% in the most recent bear market and underperformed comparable funds by 16.24%. 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 1.69, which means it is hypothetically more volatile than the market at large. 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. Over the past 5 years, the fund has a positive alpha of 8.57. This means that 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 principally on equities that are traded in the United States.

As of the last filing date, the mutual fund has 85.48% of its assets in stocks, which have an average market capitalization of $183.81 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Other

This fund's turnover is about 27%, so the fund managers are making fewer trades than the average comparable fund.

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, INPIX is a no load fund. It has an expense ratio of 1.46% compared to the category average of 1.36%. So, INPIX is actually more expensive than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $15,000; each subsequent investment has no minimum amount.

Bottom Line

Overall, ProFunds Internet UltraSector Investor has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, ProFunds Internet UltraSector 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 Sector - Tech, make sure to go to www.zacks.com/funds/mutual-funds 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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