If you've been stuck searching for Sector - Tech funds, consider ProFunds Semicond UltraSector Investor (SMPIX) as a possibility. SMPIX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
SMPIX 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 SMPIX. Since ProFunds Semicond UltraSector Investor made its debut in June of 2000, SMPIX has garnered more than $238.55 million in assets. The fund's current manager, Michael Neches, has been in charge of the fund since October of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. SMPIX has a 5-year annualized total return of 40.3% and is 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 41.56%, which places it in the top 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. The standard deviation of SMPIX over the past three years is 52.74% compared to the category average of 25.14%. The standard deviation of the fund over the past 5 years is 47.43% compared to the category average of 24.65%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 2.21, the fund is likely to be more volatile than the market average. 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. SMPIX's 5-year performance has produced a positive alpha of 14.37, which means managers in this portfolio are skilled in picking 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, SMPIX is a no load fund. It has an expense ratio of 1.46% compared to the category average of 1.41%. From a cost perspective, SMPIX is actually more expensive than its peers.
This fund requires a minimum initial investment of $15,000, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively strong performance, worse downside risk, and higher fees, ProFunds Semicond UltraSector Investor ( SMPIX ) has a high Zacks Mutual Fund rank, and therefore looks 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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This article originally published on Zacks Investment Research (zacks.com).
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