Have you been searching for a Sector - Health fund? You might want to begin with ProFunds Biotech Ultra Sector Investor (BIPIX). While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
Objective
Zacks categorizes BIPIX as Sector - Health, a segment packed with options. Sector - Health mutual funds offer investors a focus on the healthcare industry, one of the largest sectors in the American economy. These funds can include everything from pharmaceutical companies to medical device manufacturers and for-profit hospitals.
History of Fund/Manager
ProFunds is based in Columbus, OH, and is the manager of BIPIX. ProFunds Biotech Ultra Sector Investor debuted in June of 2000. Since then, BIPIX has accumulated assets of about $115.03 million, according to the most recently available information. The fund is currently managed by Michael Neches who has been in charge of the fund since October of 2013.
Performance
Of course, investors look for strong performance in funds. BIPIX has a 5-year annualized total return of 10.58%, 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 23.73%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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, BIPIX's standard deviation comes in at 39.41%, compared to the category average of 20.8%. Looking at the past 5 years, the fund's standard deviation is 34.69% compared to the category average of 23.89%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.29, which means it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -0.23, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, BIPIX is a no load fund. It has an expense ratio of 1.41% compared to the category average of 1.40%. So, BIPIX is actually more expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $15,000 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Sector - Health, 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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This article originally published on Zacks Investment Research (zacks.com).