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Is USAA Small Cap Stock Fund (USCAX) a Strong Mutual Fund Pick Right Now?
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Small Cap Blend fund seekers may want to consider taking a look at USAA Small Cap Stock Fund (USCAX - Free Report) . USCAX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify USCAX in the Small Cap Blend category, an area rife with potential choices. Small Cap Blend mutual funds usually target companies with a market capitalization of less than $2 billion. A small-cap blend mutual fund allows investors to diversify their funds among various types of small-cap stocks, which can help reduce the volatility inherent in lower market cap companies.
History of Fund/Manager
Victory is based in Columbus, OH, and is the manager of USCAX. USAA Small Cap Stock Fund debuted in August of 1999. Since then, USCAX has accumulated assets of about $744.95 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 13.22%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 12.41%, which places it in the top 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 20.14%, the standard deviation of USCAX over the past three years is 26.19%. Over the past 5 years, the standard deviation of the fund is 21.92% compared to the category average of 17.02%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. USCAX has a 5-year beta of 1.29, which means it is likely to be more volatile than the market average. 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 -4.6, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 82.68% of its assets in stocks, and these companies have an average market capitalization of $3.13 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Industrial Cyclical
Turnover is 71%, which means, on average, the fund makes more traders than comparable funds in a given year.
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, USCAX is a no load fund. It has an expense ratio of 1.10% compared to the category average of 1.08%. Looking at the fund from a cost perspective, USCAX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, USAA Small Cap Stock Fund ( USCAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, USAA Small Cap Stock Fund ( USCAX ) looks like a somewhat average choice for investors right now.
This could just be the start of your research on USCAXin the Small Cap Blend category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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 Small Cap Stock Fund (USCAX) a Strong Mutual Fund Pick Right Now?
Small Cap Blend fund seekers may want to consider taking a look at USAA Small Cap Stock Fund (USCAX - Free Report) . USCAX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify USCAX in the Small Cap Blend category, an area rife with potential choices. Small Cap Blend mutual funds usually target companies with a market capitalization of less than $2 billion. A small-cap blend mutual fund allows investors to diversify their funds among various types of small-cap stocks, which can help reduce the volatility inherent in lower market cap companies.
History of Fund/Manager
Victory is based in Columbus, OH, and is the manager of USCAX. USAA Small Cap Stock Fund debuted in August of 1999. Since then, USCAX has accumulated assets of about $744.95 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 13.22%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 12.41%, which places it in the top 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 20.14%, the standard deviation of USCAX over the past three years is 26.19%. Over the past 5 years, the standard deviation of the fund is 21.92% compared to the category average of 17.02%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. USCAX has a 5-year beta of 1.29, which means it is likely to be more volatile than the market average. 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 -4.6, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 82.68% of its assets in stocks, and these companies have an average market capitalization of $3.13 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Technology
- Industrial Cyclical
Turnover is 71%, which means, on average, the fund makes more traders than comparable funds in a given year.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, USCAX is a no load fund. It has an expense ratio of 1.10% compared to the category average of 1.08%. Looking at the fund from a cost perspective, USCAX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, USAA Small Cap Stock Fund ( USCAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, USAA Small Cap Stock Fund ( USCAX ) looks like a somewhat average choice for investors right now.
This could just be the start of your research on USCAXin the Small Cap Blend category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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.