Bear Market Funds to Buy – Grizzly Short Fund (GRZZX)
Grizzly Short Fund (GRZZX) is not your average bear (sorry).
Although the best performance does not necessarily translate to the best mutual fund selection for your portfolio, investors buying bear market funds typically want a fund that shows promise of high returns in a negative return environment.
Offered by Leuthold Weeden Capital Management, GRZZX attempts to maintain a position of 100% short individual stocks at all times. This carries added risk compared to the average bear market fund, but does allow GRZZX to come up with some pretty impressive gains in an otherwise losing bear market. In 2008, GRZZX had a staggering gain of 73.3%, while the average bear market fund gained 29.9%.
However, that performance also comes with a high expense ratio of 3.44% and, although below average for the category, you’ll have to buy at least $10,000 worth of shares for an initial investment amount (in regular accounts — IRA holders only need to buy $1,000 initially).
As is the case with any form of investment, extreme returns go hand in hand with extreme risk. Therefore extreme caution is also given for anyone considering this fund or other bear market funds.
As of this writing, Kent Thune did not hold a position in any of the aforementioned securities. Under no circumstances does this information represent a recommendation to buy or sell securities.