Prudent Bear Fund (BEARX)

[HenryTo]

Down 4.07% for August after rising 6.23% during July - which was its best month since December 2002.

http://quicktake.morningstar.com/FundNet/TotalReturns.aspx?Country=USA&Symbol=BEARX&fdtab=returns

This is arguably the best fund in the Morningstar bear fund category, as the stats suggest (see the link above).

Also, on an upside/downside capture basis:

From January 1996 to June 2007:

* The fund had 63 up months vs. 75 down months, while the S&P 500 had 89 up months vs. 49 down months.

* The average upside monthly return was 5.28% vs. an average downside monthly return of -4.29%. On the other hand, the S&P 500 had an average upside monthly return of 3.36%, vs. a downside monthly return of -3.62%.

* Using the S&P 500 as a benchmark, the upside capture was -67.1%, while its downside capture was -259.3%. In a nutshell, that means, on average, when the S&P 500 is up by 1%, the fund loses 0.671%, but that when the S&P 500 declines by 1%, the fund usually rises by 2.593%.

From July 2002 to June 2007 (or over the last five years):

* The fund had 31 up months vs. 29 down months, while the S&P 500 had 43 up months vs. 17 down months.

* The average upside monthly return was 2.40% vs. an average downside monthly return of -2.60%. On the other hand, the S&P 500 had an average upside monthly return of 2.46%, vs. a downside monthly return of -3.02%.

* Using the S&P 500 as a benchmark, the upside capture was -39.3%, while its downside capture was -123.9%. In a nutshell, that means, on average, when the S&P 500 is up by 1%, the fund loses 0.393%, but that when the S&P 500 declines by 1%, the fund usually rises by 1.239%.

Note that the above post should not be construed as a recommendation to invest in the fund.

[HenryTo]

Given both the long and short positions that the fund holds, however, a better comparison would be to use the Russell 2000 value index as a benchmark.

From July 2002 to June 2007 (or over the last five years):

* The fund had 31 up months vs. 29 down months, while the Russell 2000 Value had 39 up months vs. 21 down months.

* The average upside monthly return was 2.40% vs. an average downside monthly return of -2.60%. On the other hand, the Russell 2000 Value had an average upside monthly return of 3.70%, vs. a downside monthly return of -3.32%.

* Using the Russell 2000 Value as a benchmark, the upside capture was -29.4%, while its downside capture was -101.8%. In a nutshell, that means, on average, when the Russell 2000 Value is up by 1%, the fund loses 0.294%, but that when the Russell 2000 Value declines by 1%, the fund usually rises by 1.018%.

Note that the above numbers for BEARX are all on an after-fee basis.

However, there is a 1% redemption charge if the fund was held for less than 30 days.