Best Mutual Funds of 2013 #1: ProFunds UltraJapan (UJPIX)
YTD Return: +108%
ProFunds UltraJapan (UJPIX) has had a remarkable year — up an eye-popping 108% to date as the combination of leverage and a bounce in the Japanese stock market has propelled this fund mightily.
The smallish UJPIX (at $58.3 million in assets) tracks a price-weighted index of the 225 most actively traded and liquid stocks traded on the Tokyo Stock Exchange. Current top holdings include: Fast Retailing (FRCOY), Softbank (SFTBF), Fanuc (FANUY), Kyocera (KYO), KDDI (KDDIY) and Honda Motor (HMC).
But there is danger here — like with RYVYX, the use of derivatives and other complex debt instruments here can result in awful results when things head south. For instance, UJPIX lost a crushing 72.6% in 2008.
See, this mutual fund aims to achieve twice the daily price movement of the index it tracks. The key here is daily — the nature of the fund makes it more of a trading vehicle rather than a long-term investment. In fact, the fund has returned an annualized -0.6% over the last decade, according to Morningstar.
That leveraging comes at a cost, as UJPIX charges 1.77% in annual expenses, or $177 per $10,000 invested.
As of this writing, Bill Wysor was long POAGX.