In the '80s, Japan was the nation to watch. Its Nikkei stock market was soaring, and the Japanese were buying up coveted properties worldwide. But after peaking in 1989, the Nikkei floundered for more than a decade, right along with the nation's economy.
Today, many believe Japan is on its way back, so the UltraJapan ProFund (UJPIX) might be worth investigating--provided you're a sophisticated investor who can handle big performance swings and understand the fund's investment strategy.
"This fund is benchmarked to the Nikkei 225 Index," says Michael L. Sapir, chairman and CEO of ProFund Advisors LLC. "We are looking to double the performance of the Nikkei on a daily basis. But at the same time, we are doubling the potential risk."
Though the fund was up 90.6 percent in 2005 and has a 3-year average gain of 29.3 percent, its performance can fluctuate during the year. For instance, during the third quarter of 2006, the fund was up over 8 percent, according to Lipper; two months later, it was down 0.05 percent.
"Japan is on a rebound and has been for the past three years," says Sapir. "There's a question about [its sustainability], but there is a view that Japan has finally gotten its economic house in order."
With that in mind, conservative investors might want to pass, while risk-taking ones may love what this fund has to offer.
Dian Vujovich is an author, syndicated columnist and publisher of fund investing sitewww.fundfreebies.com