Back to top

Image: Bigstock

Is USAA Aggressive Growth Fund (USAUX) a Strong Mutual Fund Pick Right Now?

Read MoreHide Full Article

On the lookout for a Large Cap Growth fund? Starting with USAA Aggressive Growth Fund (USAUX - Free Report) should not be a possibility at this time. USAUX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

USAUX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.

History of Fund/Manager

Victory is based in Columbus, OH, and is the manager of USAUX. USAA Aggressive Growth Fund made its debut in October of 1981, and since then, USAUX has accumulated about $2.31 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 20.56%, and is in the middle 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 21.11%, 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. Over the past three years, USAUX's standard deviation comes in at 21.07%, compared to the category average of 17.56%. Looking at the past 5 years, the fund's standard deviation is 17.04% compared to the category average of 14.47%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.05, 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. USAUX's 5-year performance has produced a positive alpha of 2.19, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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 0.64% compared to the category average of 1.02%. 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 low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, USAA Aggressive Growth Fund ( USAUX ) looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Large 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. 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.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


USAA AGGRESSIVE GROWTH FD (USAUX) - free report >>

Published in