Sector - Health fund seekers should not consider taking a look at ProFunds Biotech Ultra Sector Investor (BIPIX) at this time. BIPIX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine 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

ProFunds is based in Columbus, OH, and is the manager of BIPIX. The ProFunds Biotech Ultra Sector Investor made its debut in June of 2000 and BIPIX has managed to accumulate roughly $246.24 million in assets, as of the most recently available information. 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 has delivered a 5-year annualized total return of 7.08%, and it sits 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 10.18%, 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. The standard deviation of BIPIX over the past three years is 30.18% compared to the category average of 13.68%. Over the past 5 years, the standard deviation of the fund is 31.42% compared to the category average of 13.3%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In BIPIX's case, the fund lost 28.69% in the most recent bear market and outperformed its peer group by 4.55%. This could mean that the fund is a better choice than comparable funds during a bear market.

Nevertheless, investors should also note that the fund has a 5-year beta of 2.01, which means it is hypothetically more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a negative alpha of -9.22, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, BIPIX is a no load fund. It has an expense ratio of 1.43% compared to the category average of 1.29%. 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.

Bottom Line

Overall, ProFunds Biotech Ultra Sector Investor ( BIPIX ) has a low Zacks Mutual Fund rank, strong performance, worse downside risk, and higher fees compared to its peers.

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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.

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