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Strategies & Market Trends : Ultra OTC Fund - UOPIX -- Ignore unavailable to you. Want to Upgrade?

To: John who wrote (1108)	1/4/2001 11:48:31 AM
From: Bernie Goldberg	Read Replies (2) \| Respond to of 2063

Hi John, You wrote:This will generate a tax loss AND remain fully investing in virtually the same instrument. I'm not so sure that will work. I think the "wash rule" states that the investment must be significantly different. In your example you would be buying the same things only managed by different managers. If you had your assets with Waterhouse and switched to E-trade that wouldn't qualify either. I think if you check the expense ratio of ProFunds OTC and QQQ you will find that there is a significant difference. QQQ is a representation of the NDX100. It achieves that by holding all of the stocks in the index. If you examine ProFunds prospectus you will see that it attempts to duplicate the preformance of the index. It has large holdings in MSFT, INTC and some others. It sells those when it needs to accumulate funds to cover redemptions. Hence the large capital gains distributions at the end of the year. This was not a problem during the first two years of it's existence which were a tremendous bull market and had very little redemptions necessary. 12/29/00 the price of UOPIX was 28.85 a Capital Gains distribution of $3.54 (12.25%). I don't know what the distribution was from QQQ but I would bet my shirt that it was nowhere near that percentage. An acct. with American Express in the amount of $25,000 would give you three trades a month at no charge. I would be interested in seeing your research on QQQ vs. ProFunds OTC. It probably would be best to assume an investment of at least 10-15K in order to see if any difference exists. Bernie in Gunnison Clear skies and 10° in a sheltered spot 97° on a thermometer in the sun.