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

To: JB2 who wrote (5)	1/16/1999 7:58:00 PM
From: astyanax	Read Replies (1) \| Respond to of 2063

>Netconductor, there's definitely a niche waiting for someone, maybe >we should start up a nice new little index fund---they're easy as >hell to manage-- the relatives of Fidelity's founder are managing the >ones at at F. How can you go wrong just buying and holding an index >of stocks? You'd think Vanguard would've jumped on Nasdaq's bandwagon >by now... Yes! I'm livid with anger that I can't find a Nasdaq Index to put some $ into! It's not just a niche that hasn't been filled, a countless number of investors are in our predicament and I wonder why fund families are ignoring it. It's even worse than the fact that they all scoff at Net funds. I wish we could start an index... Anyway, just to show you what a problem this is ... what a widespread complaint it is regarding a lack of NASDAQ Index funds, I will reprint an excellent article from TheStreet.com detailing this dilemma. It's at thestreet.com but only available to subscribes (free initial trial, then pay $). For those who cannot access this recent article, here it is (sorry about the screwed formatting): Is There a Nasdaq 100 Index Fund? By Dagen McDowell Senior Writer 1/14/99 12:09 PM ET I am using this column to address a question that shows up in my email box even more frequently than spam. Not surprisingly, it involves investing in a soaring area of the market: the Nasdaq 100. Ken Clepper wants to know if "there is any information on a new fund that tracks the Nasdaq 100." Ken, I can see why you would be attracted to this index. In 1998 the Nasdaq 100, the 100 largest nonfinancial companies on the Nasdaq Stock Market, skyrocketed 85.3%. That's even more impressive when compared with other major indexes. For 1998, the Dow Jones Industrial Average was up 16.1%, the S&P 500 rose 26.7%, the Nasdaq Composite Index surged 39.6% and the Russell 2000 closed down 3.4% Unfortunately, there is only one fund I know of that tracks the Nasdaq 100: Rydex OTC. This no-load fund is not your garden-variety index fund. It does not attempt to own all 100 securities in the index. Instead, it will hold what the company calls "representative securities included in the Nasdaq 100 Index and other instruments that are expected to provide returns that correspond to those of the Nasdaq 100 index." That's according to the description found on the Rydex Web site. The fund may also buy stock index futures, options on stock index futures and options on indexes and other securities. Rydex OTC returned 86.6% last year, in line with the rise of the corresponding index. There is a $25,000 minimum investment if you open an account directly with Rydex; however, the fund is available through fund marketplaces for a much lower minimum. Are there any Rydex OTC shareholders out there who want to weigh in on this fund? Email me at fundforum@thestreet.com with your comments. Does anyone know of any other funds that track to Nasdaq 100? I know of two more funds worth mentioning, although they aren't exactly index funds. The Potomac OTC Plus fund and the ProFunds UltraOTC fund both try to exceed the performance of the Nasdaq 100 using futures and options. Potomac OTC Plus tries to return 125% of the Nasdaq 100. The ProFunds UltraOTC fund aims to return 200% of the index. But don't let those numbers lull you into a sense of comfort and delight. If that index drops, these funds will fall even further than the actual index. For more on these funds, visit their Web sites at www.potomacfunds.com and www.profunds.com.