Is Ultra Short Japan ProFunds Investor Class (UKPIX) the Worst Performing Mutual Fund in 2024? #JapanFinance

We recently published a list of 8 Worst Performing Mutual Funds in 2024. In this article, we are going to take a look at where Ultra Short Japan ProFunds Investor Class (UKPIX) stands against other worst performing mutual funds in 2024.

Mutual funds with exposure to large and mid-cap US companies were big winners in 2024 as the overall US equity market remained bullish for the second year in a row. As the artificial intelligence boom drove markets higher, some mutual funds outperformed the overall market, and the S&P 500 gained 24%.

Large-cap growth funds were up by almost 30% for the year. That was the highest gain of all the main fund categories. Small-cap growth funds were up by an average of 14.7%, as mid-cap growth funds surged 16%.

According to LSEG, the average U.S. stock fund increased 17.4% overall in 2024, including a 1.2% gain in the fourth quarter. Even though the 2024 performance didn’t quite match the previous year’s 21% gain, stock funds have now experienced impressive growth for two consecutive years. The main drivers of the gains were the U.S. economy’s recovery and investors’ expectation that the Federal Reserve would cut rates.

READ ALSO: 10 Best Get Rich Quick Stocks To Invest In and 10 Worst Performing Altcoins in 2025.

The explosion of artificial intelligence and the technologies supporting its adoption and growth also had a hand in driving stocks, thus helping to improve the performance of funds that finished at the top. Increased holdings from the “Magnificent Seven” technology stocks, such as Nvidia and Meta Platforms, allowed U.S. large-cap growth funds to maintain their dominance in the mutual fund market.

“It’s hard to outperform large-cap when you’re in small-cap and you don’t have the Mag Seven,” says Brian Smoluch, a longtime co-manager of the small-cap growth fund.

On average, foreign stock funds were unable to keep up with their U.S. counterparts. The fourth quarter’s 7.3% thrashing held back the category’s 4.8% gain. On the other hand, bond funds saw a modest increase for the year. Investment-grade debt funds recovered from a nearly 3% drop in the fourth quarter to end the year up 1.8%.

Investors remain bullish on mutual funds focused on bonds and U.S. stock funds. According to estimates, investors pumped a net $177.2 billion into U.S.-stock mutual funds and exchange-traded funds (ETFs) in 2024. Only $11.6 billion was allocated to international stock funds.

Although the frenetic buying that occurred earlier in the year subsided as the year came to a close, bond funds fared better in the flows than stock funds. According to ICI estimates, investors poured a net $488.6 billion into bond funds for the entire year 2024 in anticipation of the Fed’s rate-cutting actions, which started in September. However, the buying slowed, and estimates indicate that December ended as a comparatively weak month for flow data.

Story Continues

To compile our list of 8 worst performing mutual funds in 2024, we first used Yahoo Finance’s screener to pick out 50 funds with the lowest year-to-date returns. Then, the top 8 funds with the lowest returns were chosen as the worst-performing mutual funds in 2024. Finally, we ranked the funds based on their 2024 returns.

At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A portfolio manager using a laptop to research the performance of mutual funds and closed-ended funds.

Mutual Fund’s 2024 Return: -34.79%

Ultra Short Japan ProFunds Investor Class (UKPIX) is a mutual fund for gaining exposure into the Japanese equity markets. Unlike other mutual funds, the fund seeks daily investment returns before fees that are -2X the return of the Nikkei 225 Stock Average. The prices of the 225 TSE First Section stocks chosen to reflect a wide range of Japanese industries and the general performance of the Japanese equity market are used to calculate the Index.

Given that the fund tries to generate -2X returns of the Nikkei 225 stock index, it tends to underperform whenever the overall market is bullish and Nikkei is edging higher. That has been the case over the past two years as Japan’s equity market has been bullish. Ultra Short Japan ProFunds Investor Class was down by 43.26% in 2023 and lost 34.79% in 2024 as the overall equity market remains bullish.

Overall, UKPIX ranks 2nd on our list of worst performing mutual funds in 2024. While we acknowledge the potential of UKPIX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UKPIX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.