I had a bad experience with a Profunds inverse fund. Neither Profunds’ website nor their prospectus described how they invest the money. I communicated via several e-mails, and still had no answer, and ended up reporting them to the SEC for failing to disclose their holdings. At the time I checked them out this spring, I noticed their fund was not the inverse, as it was supposed to be. I didn’t realize Rydex existed, and forgot all about bear funds until I read America’s Bubble Economy.
Partial quote: “I am closing out on all Profunds because they have mismanaged my money. They refuse to even give me an explanation of what happened. SRPIX’s goal is to be the inverse of the Dow Jones Home Builder’s Index. Over the last 12 trading days, DJ_HOM dropped 10%. This should result in SRPIX being up 10% or close to it. Instead I’m down! What the f**k did the fund manager do? This person is obviously terrible with our money.” – OutAtThePeak
