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Is USAA Aggressive Growth Fund (USAUX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for All Cap Growth funds, consider USAA Aggressive Growth Fund (USAUX - Free Report) as a possibility. USAUX bears 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
USAUX is a part of the USAA Group family of funds, a company based out of San Antonio, TX. USAA Aggressive Growth Fund made its debut in October of 1981, and since then, USAUX has accumulated about $1.54 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 12.17%, and it sits 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 14.79%, 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. The standard deviation of USAUX over the past three years is 14.28% compared to the category average of 11.39%. The fund's standard deviation over the past 5 years is 13.78% compared to the category average of 11.36%. 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 4%. This makes the fund a possibly worse choice than its peers during a sliding 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. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. USAUX has generated a negative alpha over the past five years of -0.08, demonstrating that 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 principally on equities that are traded in the United States.
The mutual fund currently has 84.11% of its holdings in stocks, with an average market capitalization of $222.85 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Industrial Cyclical
Finance
With turnover at about 16%, this fund is making fewer trades than the average comparable fund.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, USAUX is a no load fund. It has an expense ratio of 0.74% compared to the category average of 1.05%. So, USAUX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, USAA Aggressive Growth Fund ( USAUX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the All Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is USAA Aggressive Growth Fund (USAUX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for All Cap Growth funds, consider USAA Aggressive Growth Fund (USAUX - Free Report) as a possibility. USAUX bears 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
USAUX is a part of the USAA Group family of funds, a company based out of San Antonio, TX. USAA Aggressive Growth Fund made its debut in October of 1981, and since then, USAUX has accumulated about $1.54 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 12.17%, and it sits 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 14.79%, 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. The standard deviation of USAUX over the past three years is 14.28% compared to the category average of 11.39%. The fund's standard deviation over the past 5 years is 13.78% compared to the category average of 11.36%. 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 4%. This makes the fund a possibly worse choice than its peers during a sliding 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. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. USAUX has generated a negative alpha over the past five years of -0.08, demonstrating that 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 principally on equities that are traded in the United States.
The mutual fund currently has 84.11% of its holdings in stocks, with an average market capitalization of $222.85 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Industrial Cyclical
- Finance
With turnover at about 16%, this fund is making fewer trades than the average comparable fund.Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, USAUX is a no load fund. It has an expense ratio of 0.74% compared to the category average of 1.05%. So, USAUX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, USAA Aggressive Growth Fund ( USAUX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the All Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.