China Funds Post Biggest Losses in August

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NEW YORK (TheStreet) -- Funds that invest in Asia, especially China, were among the worst-performing stock mutual funds in August.

Six of the 10 biggest laggards invested in China, while two more bought stocks more broadly in Asia, excluding for Japan. Inverse funds weren't included in the list.

Two of the funds doubled down with 200% negative leverage: the Direxion China Bull 2X Fund(DXHLX Quote) and the Ultra China ProFund(UGPIX Quote). They lost 13% and 10%, respectively.

While the Direxion fund is leveraged to the FTSE/Xinhua China 25 Index, the ProFund holds the American Depositary Receipts of stocks in mainland China and Hong Kong, including China Mobile(CHL Quote), PetroChina(PTR Quote), CNOOC(CEO Quote), and China Unicom Hong Kong(CHU Quote).

Telecommunications was the largest sector weighting of the China ProFund, with 14%. The portfolio has 12% of its assets in oil and gas stocks, and 10% in Internet shares.

Interestingly, the Mobile Telecom UltraSector ProFund(WCPIX Quote) was the only fund that lost more than the China portfolios. Sprint Nextel(S Quote), the fund's biggest holding with 53% of its assets, fell 8.5% in August, when the S&P 500 Telecommunication Services Index declined 2.4%. MetroPCS Communications(PCS Quote), its No. 2 position, lost 31%. Phone makers Apple(AAPL Quote) and Nokia(NOK Quote), and EXCHANGE="NYSE" PRIMARY="NO"/>, in contrast, gained 3.3% and 7.7%, respectively.

Worst Performing Stock Mutual Funds in August Fund (Ticker) Rating Objective Total Return 1 Month Mobile Telecom UltraSector ProFund (WCPIX) E- Technology -15.12% Direxion China Bull 2X Fund (DXHLX) U China -12.71% ProFunds Ultra China ProFund (UGPIX) U China -10.38% Dreyfus Greater China Fund (DPCRX) B- China -9.70% Prasad Growth Fund (PRGRX) U Growth -9.52% Buffalo Jayhawk China Fund (BUFCX) U China -7.84% China Region Fund (USCOX) B Asian Pac Ex Japan -7.49% AIM China Fund (AACFX) C+ China -7.27% Columbia Greater China Fund (NGCAX) B- China -7.21% Fidelity Advisor China Region Fund (FHKAX) U Asian Pac Ex Japan -6.91% Source: Bloomberg and TheStreet.com

-- Reported by Kevin Baker in Jupiter, Fla.

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