Are you on the hunt for a Sector – Tech fund? You should think about starting with ProFunds Tech UltraSector Investor (TEPIX). 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
The world of Sector – Tech funds is an area filled with options, and TEPIX is one of them. Sector – Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach. Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.
History of Fund/Manager
ProFunds is based in Columbus, OH, and is the manager of TEPIX. ProFunds Tech UltraSector Investor made its debut in June of 2000, and since then, TEPIX has accumulated about $131.68 million in assets, per the most up-to-date date available. The fund’s current manager, Michael Neches, has been in charge of the fund since October of 2013.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 22.9%, and it sits in the top 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 40.14%, 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 TEPIX over the past three years is 33.63% compared to the category average of 20.41%. The standard deviation of the fund over the past 5 years is 36.05% compared to the category average of 23.45%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 2.01, 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. The fund has produced a positive alpha over the past 5 years of 3.56, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.