shorting- Mutual Funds
I have been increasing my position in the Prudent Bear- BEARX, doing quite well, I feel the insulation of buying into a Mutual Fund that will short as opposed to an Equity.
I purchase it thru Fidelity's Fund Family, No load fund.
Any thoughts?
Answers
1130 points
sundarkambam answered one year ago …
Here is the morningstar's take on this fund :
This fund sports an outstanding performance record. Most of the offerings in its category have turned in poor results over the past five years, but compared with its peers, this offering's returns are among the best. We focus on five-year returns because longer records have greater predictive power than shorter records. Be sure to find out how much risk the fund took on to produce these results, however.
This fund is in the specialty bear-market category. Many bear-markets funds have large short positions. Others have substantial stakes in investments such as gold bullion. You should carefully investigate this fund's holdings and how it is managed to determine how it might behave in different market conditions and to make sure that it compliments other offerings you may own.
This offering is a bear-market fund. Bear market funds typically contain large short positions, making it difficult to assess how one offering's sector weightings compare to its peers'. For that reason, Morningstar does not analyze these funds sector weightings.
his fund has a fairly standard expense ratio for a no-load offering in its category. That's fine, but not great. Expenses are a big factor in long-term, relative performance, and funds with lower expenses generally outperform those with higher expenses.
This fund has had stable management. This is helpful in assessing its performance history because you know that most or all of its record stems from their efforts.
For full details see the link :
http://quicktake.morningstar.com/FundNet/Diagnostic.aspx?Country=USA&Symbol=BEARX
4085 points
EthanR answered one year ago …
I believe that during the last bear market, BEARX was up over 60%.
Read more from EthanR
105 points
lenwire answered one year ago …
I can't say I am completely familiar with this fund. I am familiar with some of the alternatives. Pro Shares offer a number of short ETF's. Most are tied to indices such as the DJII or S&P 500. They also offer sector specific ETF's and international exposure like the Ultra Short China. The funds are either "Short" or "Ultra Short." Short funds attempt to have daily investment results that correspond to the inverse return of the daily performance of the underlying index. Ultra Short uses leverage in an attempt to double that return. Take for example the DXD: UltraShort Dow30. ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones Industrial Average Index. The expenses ratio on most of the funds is .95%. Shares of ProShares Funds are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. ETF's trade on the exchanges as opposed to mutual funds that are redeemed from the issuing fund and only at the closing price. This liquidity makes these shares more attractive than mutual funds in this market environment, IMHO.
For more info, check out www.proshares.com.
