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Is ProFunds Biotech Ultra Sector Investor (BIPIX) a Strong Mutual Fund Pick Right Now?

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There are plenty of choices in the Sector - Health category, but where should you start your research? Well, one fund that might be worth investigating is ProFunds Biotech Ultra Sector Investor (BIPIX - Free Report) . BIPIX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Sector - Health funds is an area filled with options, such as BIPIX. Healthcare is one of the biggest sectors of the American economy, and Sector - Health mutual funds provide a great opportunity to invest in this industry. Here, funds can include everything from for-profit hospitals to pharmaceutical companies and medical device manufacturers.

History of Fund/Manager

BIPIX is a part of the ProFunds family of funds, a company based out of Columbus, OH. Since ProFunds Biotech Ultra Sector Investor made its debut in June of 2000, BIPIX has garnered more than $61.03 million in assets. Michael Neches is the fund's current manager and has held that role since October of 2013.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 0.49%, and is in the bottom 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 -0.6%, which places it in the bottom 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. Compared to the category average of 25.26%, the standard deviation of BIPIX over the past three years is 35.61%. Over the past 5 years, the standard deviation of the fund is 31.95% compared to the category average of 24.62%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. BIPIX has a 5-year beta of 1.33, which means it is likely to be more volatile than the market average. 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. BIPIX has generated a negative alpha over the past five years of -14, demonstrating 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, BIPIX is a no load fund. It has an expense ratio of 1.51% compared to the category average of 1.41%. From a cost perspective, BIPIX is actually more expensive than its peers.

Investors need to be aware that with this product, the minimum initial investment is $15,000; 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

Overall, even with its comparatively weak performance, worse downside risk, and higher fees, ProFunds Biotech Ultra Sector Investor ( BIPIX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

Your research on the Sector - Health segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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