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Is USAA Aggressive Growth Fund (USAUX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding an All Cap Growth fund? USAA Aggressive Growth Fund (USAUX - Free Report) is a potential starting point. USAUX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that USAUX is an All Cap Growth option, and is loaded with different selections. All Cap Growth mutual funds look to invest in a wide variety of equities, no matter the size of the company and as long as the firm exhibits growth characteristics. In order to increase diversification, these portfolios have holdings across small, medium, and large-cap levels.
History of Fund/Manager
USAA Group is based in San Antonio, TX, and is the manager of USAUX. USAA Aggressive Growth Fund made its debut in October of 1981, and since then, USAUX has accumulated about $1.59 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 11.44%, and is in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 15.26%, which places it in the middle third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 11.06%, the standard deviation of USAUX over the past three years is 13.04%. Looking at the past 5 years, the fund's standard deviation is 13.11% compared to the category average of 10.83%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In USAUX's case, the fund lost 52.56% in the most recent bear market and underperformed comparable funds by 3.72%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 1.1, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -0.32, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 98.21% of its assets in stocks, which have an average market capitalization of $253.50 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Retail Trade
Industrial Cyclical
Turnover is about 57%, so those in charge of the fund make more trades in a given year than the average of comparable funds.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, USAUX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 1.05%. So, USAUX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $50.
Bottom Line
Overall, USAA Aggressive Growth Fund ( USAUX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
Don't stop here for your research on All Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare USAUX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is USAA Aggressive Growth Fund (USAUX) a Strong Mutual Fund Pick Right Now?
Having trouble finding an All Cap Growth fund? USAA Aggressive Growth Fund (USAUX - Free Report) is a potential starting point. USAUX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that USAUX is an All Cap Growth option, and is loaded with different selections. All Cap Growth mutual funds look to invest in a wide variety of equities, no matter the size of the company and as long as the firm exhibits growth characteristics. In order to increase diversification, these portfolios have holdings across small, medium, and large-cap levels.
History of Fund/Manager
USAA Group is based in San Antonio, TX, and is the manager of USAUX. USAA Aggressive Growth Fund made its debut in October of 1981, and since then, USAUX has accumulated about $1.59 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 11.44%, and is in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 15.26%, which places it in the middle third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 11.06%, the standard deviation of USAUX over the past three years is 13.04%. Looking at the past 5 years, the fund's standard deviation is 13.11% compared to the category average of 10.83%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In USAUX's case, the fund lost 52.56% in the most recent bear market and underperformed comparable funds by 3.72%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 1.1, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -0.32, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 98.21% of its assets in stocks, which have an average market capitalization of $253.50 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Retail Trade
- Industrial Cyclical
Turnover is about 57%, so those in charge of the fund make more trades in a given year than the average of comparable funds.Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, USAUX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 1.05%. So, USAUX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $50.
Bottom Line
Overall, USAA Aggressive Growth Fund ( USAUX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
Don't stop here for your research on All Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare USAUX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.