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Is Victory Small Cap Stock (USCAX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Small Cap Blend fund? Well, Victory Small Cap Stock (USCAX - Free Report) would not be a good potential starting point right now. USCAX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
USCAX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 billion, and aid in reducing volatility inherent in lower market cap stocks.
History of Fund/Manager
Victory is based in Columbus, OH, and is the manager of USCAX. Victory Small Cap Stock made its debut in August of 1999, and since then, USCAX has accumulated about $555.26 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. USCAX has a 5-year annualized total return of 4.09%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 14.08%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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, USCAX's standard deviation comes in at 18.92%, compared to the category average of 14.51%. Looking at the past 5 years, the fund's standard deviation is 19.73% compared to the category average of 15.77%. 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 1.09, which means it is likely to be more volatile than the market average. 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. The fund has produced a negative alpha over the past 5 years of -8.16, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 mostly on equities that are traded in the United States.
Right now, 80.55% of this mutual fund's holdings are stocks, with an average market capitalization of $4.73 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Industrial Cyclical
Technology
Health
Turnover is 140%, which means this 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 1.01% compared to the category average of 0.96%. USCAX is actually more expensive than its peers when you consider factors like cost.
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.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, Victory Small Cap Stock ( USCAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Victory Small Cap Stock ( USCAX ) looks like a somewhat weak choice for investors right now.
This could just be the start of your research on USCAX in 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Victory Small Cap Stock (USCAX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Small Cap Blend fund? Well, Victory Small Cap Stock (USCAX - Free Report) would not be a good potential starting point right now. USCAX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
USCAX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 billion, and aid in reducing volatility inherent in lower market cap stocks.
History of Fund/Manager
Victory is based in Columbus, OH, and is the manager of USCAX. Victory Small Cap Stock made its debut in August of 1999, and since then, USCAX has accumulated about $555.26 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. USCAX has a 5-year annualized total return of 4.09%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 14.08%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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, USCAX's standard deviation comes in at 18.92%, compared to the category average of 14.51%. Looking at the past 5 years, the fund's standard deviation is 19.73% compared to the category average of 15.77%. 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 1.09, which means it is likely to be more volatile than the market average. 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. The fund has produced a negative alpha over the past 5 years of -8.16, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 mostly on equities that are traded in the United States.
Right now, 80.55% of this mutual fund's holdings are stocks, with an average market capitalization of $4.73 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 140%, which means this 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 1.01% compared to the category average of 0.96%. USCAX is actually more expensive than its peers when you consider factors like cost.
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.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, Victory Small Cap Stock ( USCAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Victory Small Cap Stock ( USCAX ) looks like a somewhat weak choice for investors right now.
This could just be the start of your research on USCAX in 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.