Is ProFunds UltraEmerging Markets Investor (UUPIX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Non US - Equity category, but where should you start your research? Well, one fund that may not be worth investigating is ProFunds UltraEmerging Markets Investor (UUPIX). UUPIX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
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 responsible for UUPIX, and the company is based out of Columbus, OH. ProFunds UltraEmerging Markets Investor debuted in April of 2006. Since then, UUPIX has accumulated assets of about $17.62 million, according to the most recently available information. Alexander V. Ilyasov is the fund's current manager and has held that role since November of 2009.
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of -3.36%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.88%, which places it in the middle 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. Over the past three years, UUPIX's standard deviation comes in at 33.97%, compared to the category average of 11.25%. Looking at the past 5 years, the fund's standard deviation is 36.53% compared to the category average of 11.66%. This makes the fund more volatile than its peers over the past half-decade.
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 underperformed comparable funds by 31%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 2.16, 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. The fund has produced a negative alpha over the past 5 years of -18.01, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, UUPIX is a no load fund. It has an expense ratio of 1.75% compared to the category average of 1.24%. Looking at the fund from a cost perspective, UUPIX 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.
Overall, ProFunds UltraEmerging Markets Investor ( UUPIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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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.