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Is ProFunds UltraEmerging Markets Investor (UUPIX) a Strong Mutual Fund Pick Right Now?

If investors are looking at the Non US - Equity fund category, make sure to pass over ProFunds UltraEmerging Markets Investor (UUPIX). UUPIX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

UUPIX is classified in the Non US - Equity area by Zacks, and this segment is full of potential. Non US - Equity funds focus their investments on companies outside of the United States, which is an important distinction since global mutual funds tend to keep a sizable portion of their portfolio based in the United States. Most of these funds will allocate across emerging and developed markets, and can often extend across cap levels too.

History of Fund/Manager

ProFunds is based in Columbus, OH, and is the manager of UUPIX. ProFunds UltraEmerging Markets Investor made its debut in April of 2006, and since then, UUPIX has accumulated about $62.32 million in assets, per the most up-to-date date available. The fund is currently managed by Alexander V. Ilyasov who has been in charge of the fund since November of 2009.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 2.09%, and it sits in the middle 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 25.1%, 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 12.9%, the standard deviation of UUPIX over the past three years is 34.47%. Looking at the past 5 years, the fund's standard deviation is 35.57% compared to the category average of 12.5%. 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. UUPIX lost 89.45% in the most recent bear market and outperformed its peer group by 31.05%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Nevertheless, investors should also note that the fund has a 5-year beta of 2.35, 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 -20.67. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, UUPIX is a no load fund. It has an expense ratio of 1.49% compared to the category average of 1.28%. So, UUPIX 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 UltraEmerging Markets Investor ( UUPIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Non US - Equity, 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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