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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: Bernie Goldberg who wrote (14682)	1/30/2001 4:56:33 PM
From: OldAIMGuy	Respond to of 18928

Hi Bernie, Yes, there's always the internal expenses of a fund and one that's as active as UOPIX must have a very high cost. Your theory of the expenses showing their ugly heads more so in a falling market adds some fuel to my thinking that I should further investigate a "switch" to QQQ as the Idiot Wave heads to High Risk. Then switch back at another time. Best regards, Tom

To: Bernie Goldberg who wrote (14682)	1/31/2001 6:54:56 PM
From: Todd Reichardt	Read Replies (1) \| Respond to of 18928

Hi Bernie, I don't agree with your statement that the large discrepancy is due to the high expense ratio of ProFunds, in fact, I don't think there is a 22% discrepancy as you allude to. The DAILY compounding of ULPIX means that the fund will not directly track the underlying index. In other words, just because the S&P500 has returned to the levels it was at in April, you shouldn't necessarily expect ULPIX to recover to the same levels as it was at in April. What happened on a daily basis can make a huge difference. ULPIX tries to achieve twice the DAILY volatility of S&P500. I went back and tested the data from April 1 through Jan 30, and found that if ULPIX had achieved the daily 2X, then the fund should be down about 20%. This is the point I was trying to bring up in my trivia question a couple of months ago on the UOPIX thread. question: Message 14949149 answer: Message 14950779 The daily compounding gives you results that are not intuitive. I think ProFunds did at least a fair job (and maybe even a great job) of achieving their stated objectives over that time period. Todd